Royal Dutch Shell Plc (RDSA)’s Argentine unit was accused of conspiring against the country’s interests by Cabinet Chief Jorge Capitanich after the oil producer increased fuel prices following a devaluation of the peso.
Shell boosted prices an average 12 percent at its service stations, which represent 18 percent of the Argentine market, the company said in an e-mailed statement published by local newspapers today. The company’s previous price increase of 6.8 percent was on Jan. 2, before Argentina moved to weaken the peso 15 percent from Jan. 22 to Jan. 23, the largest drop since 2002.
“Shell’s attitude and the one from its highest executive is conspiratorial and against the interests of the country,” Capitanich told reporters this morning in Buenos Aires. “The only explanation for this behavior is greediness.”
The sudden fall in the peso, which is the worst performing currency in the world after tumbling 19 percent this year, prompted Shell to increase prices again, the company said in the statement. The increase was the first by a fuel distributor in the Buenos Aires area since the devaluation and occurred 10 days after the government said Shell Argentina’s Chief Executive Officer Juan Jose Aranguren attempted to interfere in the currency exchange market by buying dollars at a higher rate than the market was selling.
“Suggestions that there was any other reason behind our decision are categorically untrue,” Kayla Macke, a spokeswoman for Shell based in Houston, said in an e-mailed response to questions. “As we explained to customers and the government in Argentina, this move is purely due to the relative increase in the cost of crude oil to our operation in the country, which has occurred as a direct result of the falling value of the peso.”
Aranguren said the price increase still trails the company’s costs.
“It is not a good thing to wake up after being accused of being a conspirator,” Aranguren said today in an interview aired by Radio Mitre. “If our costs increase 23 percent and we increase our prices by 12 percent, could that be considered greediness?”
YPF SA (YPF:US), Argentina’s biggest energy company, declined to comment on a potential fuel price increase in an e-mailed response to questions. YPF owns 1,500 service stations in Argentina, or 58 percent of the market.
Argentina, which was censured by the International Monetary Fund in February 2013 for underreporting inflation, has moved to contain consumer price increases in the wake of the devaluation by threatening to fine or close businesses and capping costs on goods from food to electronics.
Consumer prices rose 28.4 percent in 2013, according to opposition lawmakers who compile private economist estimates. Prices rose 10.9 percent last year, according to the government.’
This isn’t the first time Shell’s CEO is accused of conspiracy against the country. Aranguren, 59, was appointed president of Shell’s Argentine unit, or Shell Compania Argentina de Petroleo SA, in 2003, the same year Nestor Kirchner was elected president. Kirchner asked consumers in 2005 to boycott Shell after it raised fuel prices.
Former Argentina Trade Secretary Guillermo Moreno imposed 83 fines against the company and took Aranguren to court. All cases were dismissed. Moreno was ousted Nov. 19 after eight years of using strong-arm tactics that earned him a reputation as a bully.
The firing of Moreno “is a signal that they can’t continue running the country the way they were running it,” Aranguren said in an interview on Dec. 9.
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