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International Herald Tribune: Shell ordered to halt premium diesel fuel sales in Argentina

EXTRACT: Last year, President Nestor Kirchner called on Argentines to boycott Shell after it raised local prices amid rising oil costs. Shell quickly nudged pump prices back down after government-aligned protest groups marched on its stations and sales slumped.

THE ARTICLE

The Associated Press: Published: September 28, 2006

BUENOS AIRES, Argentina The Argentine unit of Royal Dutch Shell has been ordered to stop selling a new premium diesel fuel, the latest incident in a dispute with the government over pricing.
 
Argentina’s Energy Secretariat published a resolution in Wednesday’s official bulletin requiring oil companies to obtain government approval for new products introduced since Sept. 1.
 
The Internal Commerce Secretariat, which brokers price agreements across the economy, informed Shell on Tuesday that due to the new regulation it had to stop selling its recently launched V-Power Diesel, which costs 10 percent more than regular diesel.
 
In a statement released Wednesday night, Shell said that “although the new resolution wasn’t in effect at the time of the (new diesel) launch, and its retroactive application is aggravating, Shell has decided to suspend sales until it obtains authorization.”
 
The new fuel apparently raised the ire of government officials intent on holding down the prices consumers pay at the pump.
 
Last year, President Nestor Kirchner called on Argentines to boycott Shell after it raised local prices amid rising oil costs. Shell quickly nudged pump prices back down after government-aligned protest groups marched on its stations and sales slumped.
 
The supply of diesel has become particularly touchy in recent weeks amid reports of shortages.
 
With domestic diesel refineries working at maximum capacity, the government has tried to persuade oil companies to import additional diesel to meet domestic demand. Oil companies say importing diesel at world prices forces them to sell it at a loss in Argentina.
 
Some oil companies operating in Argentina have agreed to import additional diesel, though Shell officials have said they have no plans to do so.
 
 BUENOS AIRES, Argentina The Argentine unit of Royal Dutch Shell has been ordered to stop selling a new premium diesel fuel, the latest incident in a dispute with the government over pricing.
 
Argentina’s Energy Secretariat published a resolution in Wednesday’s official bulletin requiring oil companies to obtain government approval for new products introduced since Sept. 1.
 
The Internal Commerce Secretariat, which brokers price agreements across the economy, informed Shell on Tuesday that due to the new regulation it had to stop selling its recently launched V-Power Diesel, which costs 10 percent more than regular diesel.
 
In a statement released Wednesday night, Shell said that “although the new resolution wasn’t in effect at the time of the (new diesel) launch, and its retroactive application is aggravating, Shell has decided to suspend sales until it obtains authorization.”
 
The new fuel apparently raised the ire of government officials intent on holding down the prices consumers pay at the pump.
 
Last year, President Nestor Kirchner called on Argentines to boycott Shell after it raised local prices amid rising oil costs. Shell quickly nudged pump prices back down after government-aligned protest groups marched on its stations and sales slumped.
 
The supply of diesel has become particularly touchy in recent weeks amid reports of shortages.
 
With domestic diesel refineries working at maximum capacity, the government has tried to persuade oil companies to import additional diesel to meet domestic demand. Oil companies say importing diesel at world prices forces them to sell it at a loss in Argentina.
 
Some oil companies operating in Argentina have agreed to import additional diesel, though Shell officials have said they have no plans to do so.

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