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ECONOMY | 28-12-2018 16:20

Energy Secretary Javier Iguacel resigns after announcing utility bill hikes

Decision paves way for return of ex-deputy Cabinet chief Gustavo Lopetegui’s to the frontline of the Mauricio Macri administration.

Energy Secretary Javier Iguacel resigned Friday afternoon, paving the way for the return of former deputy Cabinet chief Gustavo Lopetegui’s to the frontline of the Mauricio Macri administration.

In a post on social media, Iguacel confirmed his resignation, adding that he would continue to work with Macri in the “Titanic-size task of transforming the nation.”

Iguacel’s exit comes in the context of another announcement of increases in gas and electricity bills, as the economy continues its downward trajectory and with inflation is expected to finish 2019 around 50%.

Iguacel, who held an off-the-record meeting with reporters on Thursday to explain these and other coming measures, had a longstanding disagreement with Economy Minister Nicolás Dujovne, who became his superior in September when the Energy Ministry was downgraded from a ministry to a government office in September.

Rumours of Iguacel’s exit began circulating in October when the Energy department announced an additional increase in gas bills in order to “compensate” energy producers.

The surcharge was to be faced by consumers and paid in 24 installments, sparking outcry that hit the government’s image at a particularly poor time moment, with President Mauricio Macri’s team trying to control a run on the peso, spiraling inflation and falling economic output.

It also later surfaced the Economy Minister Dujovne hadn’t been informed of the decision.

Subsidies

Iguacel had fought to cut consumer subsidies, which the Cambiemos (Let’s Change) coalition considers part of the “legacy” left by the previous Kirchnerite governments, but also he was seen as seeking to protect energy producers.

One of his battles focused on the Vaca Muerta shale formation in Patagonia, where the national government subsidises the production of crude oil. While Iguacel was pushing to maintain subsidies to oil companies in order to increase production at Vaca Muerta, Dujovne was instructed by the International Monetary Fund — which gave Argentina emergency funds as the country’s currency crisis accelerated — to cut the fiscal deficit, and therefore reduce subsidies.

Ultimately, Iguacel budged, but according to reports, he appears to have at some point angered Paolo Rocca, the powerful CEO of Techint and one of the largest players in Vaca Muerta through Tecpetrol.

Lopetegui returns

The return of Lopetegui comes nearly four months after he was pushed out, alongside his fellow deputy Cabinet chief Mario Quintana, as Macri reshuffled and cut his Cabinet to face the economic crisis. Lopetegui, though, never left, as he remained as an advisor to the Presidency, and more specifically, to Cabinet Chief Marcos Peña.

In his previous job, Lopetegui was in charge of coordinating ministries that included the then-Energy Ministry, at the time headed by former Shell CEO Juan José Aranguren. Lopetegui had a hand in pushing Iguacel’s designation as Energy Minister.

Interestingly, Lopetegui also supervised Minister Dujovne, to whom he will have to report in his new position.

- TIMES/PERFIL

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