Argentina To Overhaul Subsidy Regime

[Judi Lynn]

NOVEMBER 2, 2011, 5:43 P.M. ET.
Argentina To Overhaul Subsidy Regime
By KEN PARKS

BUENOS AIRES–Argentina's government said it will overhaul the costly energy and transportation subsidies that have become a growing burden on public finances, signaling an end to a key pillar of President Cristina Kirchner's economic program

Planning Minister Julio De Vido said in a televised press conference Wednesday that public utility rates that consumers pay will remain unchanged. Effective immediately, he said financial companies, mobile operators and resource extraction firms, among other sectors, will no longer receive water, gas and electricity subsidies for annual savings of 600 million pesos ($142 million).

"No one should receive a subsidy they don't need because at the end of the day everyone else pays," Mr. De Vido said.

The federal government will also start talks this week to hand over the Buenos Aires subway system, which requires about 700 million pesos a year in subsidies, to the city government, Mr. De Vido said.

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