Royal Dutch Shell Plc  .com Rotating Header Image Argentina Government OKs Renewed Fuel Exports For All But Shell

January 16, 2008: 08:40 AM EST

BUENOS AIRES -(Dow Jones)- The Argentine government will allow three of the nation’s four top fuel retailers to continue to export fuels after they rolled back pump prices to October levels, a government official told Dow Jones Newswires Wednesday.

The government’s price control agency, the Interior Commerce Secretariat, gave the local units of Repsol YPF SA (REP), Petroleo Brasiliero (PBR), and ExxonMobil Corp. (XOM) the green light to export fuels Tuesday, the official said on the condition he not be named.

He said the export decision would not be officially published since the measure is authorized under an existing hydrocarbons law.

Royal Dutch Shell (RDSA) won’t be allowed to export fuels, however, “because it didn’t lower its prices,” the official said. A spokesman for Shell said the company had not been formally notified, adding that he planned later Wednesday to check on pending export requests filed with the government. Argentina’s top price controller, Interior Commerce Secretary Guillermo Moreno, called officials from Repsol, Exxon, and Petrobras on Jan. 7, threatening to cut off fuel exports if the companies didn’t roll back pump prices.

Moreno didn’t call on Shell officials, however, since price controllers have excluded the company from talks since last year, after Shell indicated that it wasn’t interested in price controls.

Repsol provides about half of the nation’s diesel and gasoline, with the other three companies roughly splitting up the remaining supply.

Until pump prices began to creep higher in April of last year, they had been more or less frozen since March 2005, when then-President Nestor Kirchner called on Argentines to boycott stations operated by Shell after the company raised pump prices.

Argentine pump prices remain among the lowest in the region due to government pressure that began under Kirchner, whose four-year term concluded last month. He was replaced by his wife, Cristina Fernandez, and some analysts had speculated she would allow prices to rise some as the nation faces the prospect of becoming a net oil importer by the end of the decade.

Argentina faces chronic shortages of diesel, especially during key harvest and planting periods, although there is still a surplus of gasoline, which has allowed refiners an opportunity for profit.

That margin was pinched in November, however, when the government raised the export tax on gasoline from 5% to around 35%.

This month’s threat to restrict exports came as ExxonMobil reportedly prepares to sell its assets in Argentina. The restriction could have undermined the company’s sale price since fuel exports are important to its profit margins.

-By Drew Benson, Dow Jones Newswires; 5411-4311-3127; [email protected]

  (END) Dow Jones Newswires
  01-16-08 0840ET
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