Argentina's government will keep fuel prices in line with what the country needs to be competitive, Planning Minister Julio De Vido said Friday.
The prices won't rise to international levels, something proposed by Spain's Repsol when it was the controlling shareholder of YPF, Argentina's largest energy producer, De Vido said at a news conference in Buenos Aires.
Argentina seized control of YPF from Repsol last month in what it said was an effort to rebuild domestic energy supply. The takeover has increased government influence in the energy sector, which has been in private hands since the 1990s.
The government has kept a lid on energy prices since 2002 to spur consumer spending and industrial activity. The economy expanded by 8% a year between 2003 and 2011.
Still, private energy companies have complained that the price caps have cut their profits and led to a decline in oil and gas production and widening energy shortages and imports. Energy imports rose 110% in 2011 on the year, led by diesel, fuel oil and natural gas.
De Vido, the country's chief energy strategist, said that since the takeover, YPF has boosted crude production by 4.1% and gas by 10.2% without increasing prices.
The company also has increased diesel and gasoline stocks at service stations by 8%, he said, adding that they had been "artificially depressed" under Repsol's control presumably as part of a tactic to pressure the government to allow prices to rise.
YPF's refineries have increased operating capacity to more than 90% from a bit more than 80% to help meet demand, he added.
YPF produces one-third of the country's 570,000 b/d of oil and close to a quarter of its 120 million cubic meters/d of gas. It also has a 50-60% share of diesel and gasoline sales.
