Provinces Threaten to Halt Oil Supplies in Response to President Milei’s Austerity Measures

In Argentina, the main oil-producing provinces have expressed their discontent with the austerity policy of the new president, Javier Milei, with a threat to halt their supply of oil and gas to the rest of the country. The governors of these provinces have stated that this move will be initiated on Wednesday if Milei remains steadfast in his intention to reduce the income transfers from the central administration to these provinces.

Milei has announced plans to cut back the monthly reimbursements of state taxes to provinces such as Chubut by an amount of 13.5 billion pesos, equivalent to approximately 15 million euros.

“If the Ministry of Finance does not deliver resources to Chubut, Chubut will not deliver its oil and gas,” warned the provincial governor Ignacio Torres, speaking to the C5N television channel.

In Argentina, the Treasury Minister, Luis Caputo, has defended the reduction in income transfers, citing the unpaid debts of Chubut province to the central government as the reason for this decision. According to him, there are ten other provinces with similar debts.

In response to the rebel governors, Milei reminded them that under Argentina’s criminal law, anyone disrupting energy supplies can face up to two years in prison.

Argentina ranks as the 39th largest oil producer and the 20th largest gas producer in the world.

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