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Bloomberg: Argentina Risks Slowdown in Economy by Fining Shell, IEA Says

By Fred Pals

Dec. 13 (Bloomberg) — The Argentine government may risk an economic slowdown by fining Royal Dutch Shell Plc for failing to supply service stations with enough diesel fuel, the International Energy Agency said in its monthly report.

In September and October, some areas of Argentina faced diesel shortages for several days as the country was gearing up for the start of the soy planting season, the IEA wrote.

“Looking ahead, the Argentine government faces difficult choices,” the IEA said in its report. “Escalate the conflict with private companies, heavily subsidize imports, or let the market work by lifting price caps,” the IEA said in the report.

The government may risk an unpopular rise in inflation and in the worst case an economic slowdown, the IEA said.

Shell officials could not be reached for comment.

To contact the reporter on this story: Fred Pals in Amsterdam at [email protected]

Last Updated: December 13, 2006 04:02 EST

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