Only in Argentina: I Can’t Continue my Vacation Because There’s no Gas
From Gas Shortages to Political Blame Games: Unpacking Argentina's Latest Crisis
In my previous column, I described Argentina as a shitshow, and honestly, recent events continue to validate that sentiment. Now, we're grappling with a gas and diesel shortage. While I'm no energy industry expert, my early career days were spent at an oil & gas multinational, giving me some insight into the situation.
Here's the crux of the matter: Sergio Massa, the presidential candidate who has, in effect, been running the country since assuming the role of Minister of Economy a year ago, is adamant about preventing gas prices from rising before his runoff against Javier Milei.
Breaking it down in terms of basic economics: if oil companies can't sell their product at a profitable price, they won't produce or sell. Estimates suggest that the current gas price is undervalued by at least 25%. To put it into perspective, one liter of gas costs around $350 pesos, which is a mere $0.30 USD.
This has led to extensive waiting lines at gas stations nationwide. Unlike recent shortages elsewhere, which might be attributed to natural disasters or transportation issues, Argentina's crisis is a direct result of governmental mismanagement.
Massa's 'Plan Platita', which I discussed previously, persists, and its consequences are evident. We're witnessing a staggering monthly inflation rate of 12% (equivalent to 300% annually).
As I write this, I'm in Salta, a province in northern Argentina. The gas shortage hasn't spared this region. My plans to explore beautiful destinations like Cafayate, Cachi, Las Salinas Grandes, Purmamarca, and Tilcara by renting a car have been thwarted. Instead, I find myself confined to a hotel, reorganizing my plans, wary of the risk of being stranded without fuel.
But let's put things into perspective. While my vacation plans being disrupted is a personal inconvenience, the broader implications are more dire. Consider the essential services: how will ambulances operate? How will trucks transport medication? What about the delivery of basic goods like food and clothing?
An ironic note to add: YPF, Argentina's flagship oil & gas company, which underwent a cycle of privatization and re-nationalization over the decades, stands as a symbol of this crisis. The rationale behind its re-nationalization was national pride and self-reliance. Yet, after accumulating a $16 billion debt due to this decision, we're still importing gas from Bolivia. A round of applause for the foresight, Kicillof.
It's quite telling, and funny, that Massa's primary reaction to the crisis is to resort to threats against companies. He's essentially mandating compliance with his directives, backed by the promise of severe sanctions. Perhaps it rings a bell: do you remember Biden blaming oil&gas companies for the spike in prices?
What's even more perplexing is the narrative being spun by Massa’s supporters and the Peronist faction. They are quick to lay the blame for this crisis at the feet of the ultra-right, accusing them of plotting to destabilize Massa's regime and diminish his presidential prospects. As I highlighted in my previous piece, this group's unwavering allegiance to their political ideology often blinds them to concrete data, verifiable facts, and the very real struggles of countless Argentinians.
I use the term "funny" here, not in jest or amusement, but rather as a means to cope, lest the situation becomes too overwhelming to bear.
Anyway, it's disheartening to see a nation with so much promise held back by short-sighted decisions. However, every crisis also presents an opportunity. Perhaps this is the wake-up call Argentina needs to reassess its priorities.
Argentinians put too much hope on its leaders and politicians. That needs to stop. And when that happens, in a country with more freedom and less dependency on the corrupt political system, we may progress once again.