FINANCIAL TIMES: Kirchner tells Argentines to boycott Shell: “Néstor Kirchner, Argentina's president, on Thursday launched the fiercest attack yet on an internationally owned company, urging his country's 36m people to boycott Royal Dutch/Shell, the Anglo-Dutch oil producer” (ShellNews.net) 10 March 05

By Adam Thomson in Buenos Aires

Published: March 10 2005

Néstor Kirchner, Argentina's president, on Thursday launched the fiercest attack yet on an internationally owned company, urging his country's 36m people to boycott Royal Dutch/Shell, the Anglo-Dutch oil producer.

“From Shell, Argentines don't have to buy anything. Don't buy a single tin of oil,” he said. His call for a “national boycott” of Shell's products follows the company's decision on Tuesday to increase the price of petrol and diesel at the pump between 2.6 per cent and 4.2 per cent.

The price increase, which Shell said resulted from the rising international cost of crude, is the first in eight months. Yet it has touched a nerve with the government at a time when fears of inflation have started to cloud Argentina's impressive economic recovery.

Prices increased an unexpected 2.5 per cent in the first two months of 2005, and most experts now predict March increases will help push that figure to 3.5 per cent since January 1. Steeper rises would come if other petrol producers follow Shell's example, they say. As of Thursday afternoon, rival producers said they were keeping prices on hold. But Mr Kirchner's confrontational tone towards an important international investor will doubtless stoke private-sector concerns over the president's outbursts of populist rhetoric.

The government has yet to announce any specific plans to combat inflation, but companies are worried Mr Kirchner may try to implement a system of price controls. They also fear the country's recent success in restructuring a record $103bn (€77bn, £54bn) of defaulted debt may encourage the leftwing Mr Kirchner to adopt more radical policies.

An early sign could come on April 20, when the government is scheduled to hold the first in a series of public meetings with the country's mainly European-owned utility companies.

The companies have been trying to persuade Buenos Aires largely without success to approve price increases to consumers, which they argue are vital to ensure adequate levels of investment.

But on Thursday, Mr Kirchner was in defiant mood. Speaking before an audience of deprived school children, to whom he had handed out brand-new smocks, the president said: “I didn't come here [to the presidency] to take a course in public relations so that everyone would like me.”