Argentina’s provinces threaten supply cutoff in dispute over federal funding cuts
Argentina’s petroleum-producing governors threaten to shut off national oil supplies due to President Javier Milei’s mandatory budgetary reduction
The governors of Argentina’s main petroleum-producing areas have issued a bold ultimatum, threatening to shut off national oil supplies in response to President Javier Milei’s mandatory budgetary reductions, in a drastic escalation of tensions inside the country. This dramatic stalemate is occurring as the southern provinces, headed by Governor Ignacio Torres of Chubut, demand that the federal government treat them fairly and with respect.
“Not a drop of oil will come out on Wednesday if they don’t respect the provinces once and for all and take their foot off our back,” Torres said in a broadcast interview on C5N. This declaration highlights the provinces’ dissatisfaction with the Economy Ministry’s reluctance to send 15.5 million pesos ($15.3 million) in federal tax money to Chubut, a decision that has caused significant indignation among the leaders of the area.
President Milei’s austerity policies, which include withholding payments from Chubut because of its outstanding obligations to the federal government, are the main source of contention. The move was supported by Economy Minister Luis Caputo on X (previously Twitter), claiming the need to recover outstanding payments from Chubut as well as from eleven other indebted regions.
But Milei’s confrontational attitude has drawn a lot of criticism. He escalated the conflict on X by calling the governors in the South “fiscal degenerates.” He made these remarks while traveling to the US, where he was supposed to speak at a conservative conference with people like Donald Trump.
Artemio Lopez and other political observers saw this conflict as Milei’s crucial miscalculation. Lopez said, “This is an unprecedented conflict due to its reach,” underscoring the peculiarities of the issue and the possibility that the central administration underestimated its severity.
Tensions between the federal administration and regional leaders are rising, which is reflected in the deadlock and deeper problems with Argentina’s governance. Argentina is a major supplier of gas and crude oil, thus the prospect of an oil supply disruption would have a big impact on both worldwide commerce and the country’s economy.
Calls for conversation have been made in response to Milei’s criticisms of the provincial governors, and despite the breakdown in communication, Torres has expressed optimism for a settlement. This fight heralds a turbulent time in Argentine politics as it arises amid greater public anger over increasing prices and regulatory reforms brought about by Milei’s government.
Source: AFP
