Argentina's president condemns threat by provincial governor to cut energy supplies in dispute

BUENOS AIRES, Argentina (AP) — The government of Argentina's libertarian President Javier Milei on Monday condemned a threat by the governor of the oil-rich province of Chubut to cut off energy supplies to the rest of the country amid a dispute over funding reductions.

"(The threat) is not an attack on the federal government, but on all Argentines,” presidential spokesperson Manuel Adorni told reporters Monday.

The squabble started late last week, when the federal government held back the transfer of 13,000 million pesos (around $15 million) in federal tax revenues to the Chubut province.

In response, Chubut Gov. Ignacio Torres — who belongs to Argentina’s main conservative bloc that has backed Milei — said his province would cut off oil and gas supplies on Wednesday if the funds are not disbursed. Torres' position was shared by five other governors in hydrocarbon-producing Patagonia.

While verbal exchanges between Milei and provincial governors have been going on for weeks, this is the first large-scale confrontation, with heads of provinces threatening to cut off energy supplies to the rest of the country.

Adorni said Monday that the government of Milei, an ultra-liberal economist who has applied a series of shock economic policies since assuming power in December, “will not allow any more whims” to provincial leaders.

He also demanded governors to apply the same adjustments at the provincial level made by the federal government and accused them of wanting to “live off the rest of the Argentinians, because of problems with their public finances.”

Provincial leaders were angered by the shock economic measures taken by Milei when he assumed power, which included slashing the currency’s value in half, suspending public works and reducing aid to provincial governments.

In the midst of the conflict with Chubut, Milei’s government ordered on Monday a reduction in fiscal funds for the province of Buenos Aires, the largest in the country and one governed by a center-left Peronist.

“National unity and the Argentine Constitution are at stake,” said Buenos Aires Gov. Axel Kicillof at a press conference upon learning of the decision to eliminate a special budget item that Buenos Aires had received since 2020 to improve the salaries of its security forces.

Kicillof said he will appear before the Supreme Court to claim the funds.

If the conflict with governors of different political stripes continues to escalate, Milei will find it difficult to garner political support for many reforms that require the approval of Congress, since his Freedom Advances party is the third strongest in Congress and lacks the seats to impose his agenda alone.