Argentina—$13.6 billion in consumption subsidies in 2014 and additional (unknown) subsidies for new oil and gas exploration and development
Argentina provided US$ 13.6 billion in fossil fuel subsidies in 2014, based on a comparison of the end-user prices paid by consumers to the full cost of supply. It has provided consumption subsidies for gas and electricity, but started cutting down gas subsidies in 2014, and ended electricity subsidies in 2016, to relieve budgetary pressures. At the same time, it has recently been investing heavily in exploration and the development of new reserves of oil and gas, including through tax breaks for companies
Argentina holds an estimated 27 billion barrels of technically recoverable oil and 23 trillion cubic metres of shale gas (Stafford, 2014). The country is a net importer of coal, with very limited domestic production (90,000 tonnes in 2013) (U.S. EIA, 2013). Despite being one of the largest producers of natural gas and crude oil in Latin America, falling production and rising consumption led Argentina to become a net importer of energy in 2011 for the first time since 1984 (Borderes and Parravicini, 2014; Fin24, 2013). The cost of fossil-fuel imports to the country was $13 billion in 2013, equal to about 20% of the Central Bank’s foreign-exchange reserves (Fin24, 2013; The Economist, 2013b).
To address its dependency on imports and to develop its export markets, Argentina is investing heavily in exploration and the development of new reserves of oil and gas (YPF, 2012). This is linked to the discovery of the Vaca Muerta shale formation in Neuquén, Rio Negro, La Pampa and Mendoza provinces, which is estimated to be the world’s second largest shale-gas deposit and fourth largest shale oil deposit (Stafford, 2014). As a result of the discovery of Vaca Muerta and other shale formations in the country, Argentina is now ranked fourth in the world behind Russia, the United States and China in terms of shale-oil reserves and second only to China in shale-gas reserves (Fossett, 2013). By 2017, it is estimated that Argentina could be producing 100,000 barrels of unconventional oil per day, as well as 13 million cubic metres in natural gas (Fin24, 2013).
Fossil fuel exploration subsidies: Argentina – Overseas Development