Argentina plans to increase the allowance for refiners and other companies to import diesel and gasoline supplies under a tax-free program in 2014, Economy Minister Axel Kicillof said Friday.
He said the government will allow companies to import 6.3 million barrels of gasoline and 44 million barrels of diesel next year, but did not provide comparative data.
The program allows importers to bring in supplies tax-free on the condition they sell them at government-controlled market prices.
"This is a transitory measure until we once again achieve energy self-sufficiency,' Kicillof said at an oil industry lunch in Buenos Aires.
Kicillof said the government has a goal of developing the hydrocarbon sector to reduce diesel, gasoline and other energy imports. He said the government has raised natural gas prices at the wellhead, cut taxes and taken other steps to encourage investment in developing conventional oil and gas reserves and large shale resources.
The state takeover of YPF in May 2012 has helped turn around that company's production, which has increased 6% in oil and 5.1% in gas since then, Kicillof said.
"In the short term, our absolute priority is to regain energy sovereignty so that no longer have an energy deficit," he said.
With domestic oil and gas production in decline over the past decade and demand on the rise, fuel imports in dollar terms surged 26% in the first 10 months of 2013 compared with the year-ago level, while energy exports dropped 22%. This was a main reason behind a 27% contraction in the overall trade surplus over the same period, according to government data.
The government began the tax-free fuel import system in 2005 to help make up for a diesel shortfall during times of peak demand in the middle and end of the year when farmers harvest crops and industrial production and tourism traffic peaks. It later expanded the program to include gasoline as domestic production fell behind consumption on a robust economy and double-digit growth in car sales.
Diesel imports rose 44% in the first 10 months of this year compared with the same period of 2012, while gasoline imports surged more than six-fold over the same period, according to the latest data from the Energy Secretariat.
The biggest refiners and retailers in the country are state-run YPF and units of Bridas, Oil M&S, Petrobras and Shell.
