Argentina watch: Hydrocarbons bill, biodiesel hike, March gas export request

Argentina’s executive branch, in a bid to get congressional approval of its hydrocarbons promotion bill, has rejigged the draft legislation.

The lengthy, complex bill had been presented in September. A key objective is boosting production to substitute imports and ramp up exports.

The project is now known as Régimen de Promoción de la Industria de Hidrocarburos (hydrocarbons industry promotional regime), local media outlet iProfesional reported. 

Lawmakers have slashed the number of articles – an original complaint – and extended to 25 years from 20 it would be in force, and proposed changes to associated tax and forex rules, among other aspects. 

In November’s mid-term elections, the governing left of center Frente de Todos coalition lost seats in congress, giving the opposition greater negotiating power.  

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Argentina’s federal energy department has hiked prices for biodiesel that is used for blending with diesel. 

The news comes amid shortages of diesel in parts of the country. 

Argentina imports some refined products, including diesel and some grades of gasoline, to bolster local supply.

The price increase is linked to efforts to ease the crisis, local media outlet EconoJournal reported. Local biodiesel production had contracted over sector disagreement with a government price freeze, it said.  

In a resolution, the department set prices for the months of April-August. The August price is 198,143 pesos (US$1,769) a tonne, up from 143,265 pesos in March.

Meanwhile, national oil company YPF, which also operates in the refining and gas station segments, said it had boosted diesel supply to help meet demand, citing fuel scarcity on the international markets as a key issue. YPF added it would continue to implement measures.

The government introduced a biofuels law in 2021 and later published associated secondary legislation to guide its implementation.

The biofuels law, in force until end-2030, was branded a promotional regime by the government, with some quarters of the biofuel industry criticizing it as damaging to the sector.

Under the law, the minimum proportion of bioethanol in the gasoline mix remains at 12% and the minimum proportion of biodiesel in the diesel mix is 5%, down from 10%. The energy department is authorized to make future cuts.

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Argentina’s federal energy department published one natural gas export authorization request in March, down from three in February. 

The request – for exports to Chile – brings the tally to eight for 2022.

Gas Meridional wants to supply up to 1.50Mm3/d of gas on a non-firm basis to Shell Chile, from the date of authorization to year-end.

Gas would be sourced from the Neuquina and/or Austral basins, from producers Pan American Energy, Pluspetrol, Vista Oil & Gas, Oilstone and GyP Neuquén, according to information published by the department.