Oil-rich Argentine provinces threaten to cut supply in dispute with Milei

Argentina's main petroleum-producing provinces have threatened to cut supplies to the rest of the country over funding cuts ordered by President Javier Milei.

"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," Governor Ignacio Torres of southern Chubut province told television channel C5N on Saturday.

Torres and counterparts from five other Patagonian provinces announced Friday that "if the Economy Ministry does not deliver its (financial) resources to Chubut, then Chubut will not deliver its oil and gas."

The provincial leaders were angered by the austerity-minded Milei's insistence on withholding from Chubut some 13.5 billion pesos ($15.3 million) in monthly transfers of federal tax revenues.

Economy Minister Luis Caputo argued on X that the cut was necessary to collect on unpaid debt from Chubut to the federal government -- and that 10 other provinces also owe money.

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In a message on X, the former Twitter, Milei denounced the southern leaders as "fiscal degenerates."

Argentina is the world's 39th largest exporter of crude oil and the 20th largest of gas. It imports refined fuels for internal consumption.

Milei, who was flying Saturday to the United States to attend a conservative gathering to be addressed by Donald Trump, took to X -- in scores of posts -- to blast Torres by his nickname, denouncing "Nacho and his accomplices."

He reminded them of an article in the penal code providing for jail sentences of up to two years for anyone hindering energy supplies.

A statement from the president's office denounced "the waste of the provinces that refuse to reduce unnecessary expenses" and referred to the provinces' opposition as "a Chavista threat."

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Hours later, Torres responded: "I hope there is a channel for dialogue. The problem is that you don't know who to talk to."

The dispute arises amid growing protests over price and fee increases as the new president promotes extensive deregulations and drastic fiscal adjustment.

Source: AFP