THE WALL STREET JOURNAL: Argentina's Kirchner Urges Citizens To Boycott Shell Oil: “A day after criticizing the local unit of the Royal Dutch/Shell Group (RD, SC) for raising prices, Argentine President Nestor Kirchner urged citizens to boycott the company” (ShellNews.net) 10 March 05
DOW JONES NEWSWIRES
March 10, 2005
BUENOS AIRES -- A day after criticizing the local unit of the Royal Dutch/Shell Group (RD, SC) for raising prices, Argentine President Nestor Kirchner urged citizens to boycott the company.
"Argentines don't have to buy from that company because it wants to charge us more than it should. Just say no to Shell ," Kirchner said during a ceremony at the Government Palace.
The verbal beating came hours after Kirchner berated the company during an interview with a Wednesday night television news show were he also said that the government will act "firmly" to keep inflation in check.
"We are not going to watch prices go up without doing anything," Kirchner told interviewers on local channel Todo Noticias' "Two Voices" news program.
Shell Argentina announced Tuesday that it would raise the price of gasoline between 2.6% and 4.2% in different parts of the country in response to international oil prices going above $55 per barrel this week.
Kirchner's criticism of Shell , which follows similar techniques he has used to publicly chide other foreign-owned energy companies, comes amid growing concern about rising inflationary signals.
Argentine consumer prices posted another unexpected increase in February - up 1.0% on the month and 8.1% on the year - to easily surpass economists' forecasts. The increase, reported by the government a week ago, follows month-on-month gains of 0.8% in December and 1.5% in January. That news has sparked concerns that inflation has returned after having been very mild last year.
During the Wednesday night television show, Kirchner reiterated his criticism of Shell for "not having solidarity with Argentina," going on to warn other companies against raising prices and accusing some sectors of trying to spook the recovering economy.
The government "isn't going to stand by with its arms crossed. Just as we did with Shell , we are going to name names," Kirchner said.
The president stopped short of announcing any concrete plans to bring inflation in line, however. The fear among some business leaders is that Kirchner will launch a system of rigid price controls.
In a sign that Kirchner is lining up his allies to confront Shell , Repsol YPF SA (REP) and Petrobras Energia Participaciones SA (PZE) quickly said they will not raise gasoline prices.
Kirchner praised the moves.
"Thank God, Repsol YPF and Petrobras aren't going to raise prices," he said.
Unlike Repsol and Petrobras, Shell Argentina has no local upstream production unit with which to internally transfer debts arising from a domestic price arrangement between refiners and producers. That has left Shell deeply in debt and created a competitive disadvantage.
Meanwhile, a group of militant activists, known as "piqueteros," were reported in front of Shell 's Buenos Aires headquarters Thursday morning. A small business federation also announced plans to join the protest later in the day.
Separately in the television interview, Kirchner offered another hint that the government is considering introducing capital controls.
He said the government will closely "analyze" the inflow of capital and that he looked favorably on a system of controls that Chile used in the 1990s. This is consistent with comments made to Dow Jones Newswires by Economy Minister Roberto Lavagna last week.
-By Drew Benson, Dow Jones Newswires; 5411-4311-3127; andrew.benson@dowjones.com