Argentina raises gas prices in bid to close bulging deficit

Bloomberg

Argentina raised prices for natural gas that should save the government $4 billion a year as part of its drive to cut subsidies that were the main cause of the largest fiscal deficit in almost two decades last year.
Government-controlled gas prices for residents, businesses, transport and power plants were raised, according to a resolution published in the Official Gazette. The average increase in prices for residents and businesses will be 174 percent, according to an Energy and Mining Ministry spokesman. Also on Saturday, car drivers filling up their tanks began paying about 6 percent more for their gasoline. The government is also planning to raise water prices by up to 500 percent, La Nacion reported.
President Mauricio Macri, who took office in December, has already reduced subsidies on electricity and transport as he seeks to cut the budget gap by 1 percentage point this year and to virtually zero by the end of his term. Low prices have prevented companies from investing in production and forced Argentina to supplement demand with imports despite the country’s abundant natural resources, Energy and Mining Minister Juan Jose Aranguren said.
“Due to the low tariffs, demand has risen and we haven’t been able to meet that with local production” Aranguren said in an interview on Radio Mitre.
An average residential gas user in Buenos Aires will now pay about 131 pesos ($8.93) a month, according to a slideshow provided by the ministry.