Wednesday, September 27, 2006
No New Diesel
Last week Nestor Kirchner and his lovely wife Christina were in New York trying to woo investors back to Argentina. One of the salient statements the anointed one made was to the effect that in Argentina "the rules of the game are clear, fair and consistent." This was a response to the criticism that Argentina is run in an arbitrary manner, with no rule of law, that the "rules of the game" varying according to the mood of the Boss.To us ignorant uninitiated observers, that seems to be the way it is, witness the boycott of Shell and the occupation of their stations instigated by Kirchner and his lackeys, arbitrary price controls, and the failure to open the bridges to Uruguay, among other outrages. But Wall Street investors ee it differently.
This brings us to Shell, who in a never-ceasing quest for profits decided to introduce a new premium diesel fuel to the Argentine market. The new fuel would sell for $2.02 US per gallon, versus $1.81 for the regular diesel. Not bad, you would say, especially considering that more than half of that price is federal tax.
However, the government is threatening to withhold approval of the new diesel, because somehow they see it as an incitement to inflation. Or maybe because it is viewed as a Fat Cats' fuel, intended for all those diesel Audis and Mercs and Beamers you see zipping through red lights on the wrong side of the road.
Or possibly it is because the guv thinks that this new diesel will decrease supplies of agricultural diesel, which is already in spot shortages around the country. That means that the spring pIanting may be inhibited, which would cut down on the government's big budget surplus, which it is using to hire more and more government employees and to subsidize things like diesel fuel for buses. It is so complicated to manage every aspect of a large economy when there is so much of it you just don't get. It's like that carnival prairie dog game - you bonk one of them down into his hole, and another one pops up somewhere else.
This brings us to Shell, who in a never-ceasing quest for profits decided to introduce a new premium diesel fuel to the Argentine market. The new fuel would sell for $2.02 US per gallon, versus $1.81 for the regular diesel. Not bad, you would say, especially considering that more than half of that price is federal tax.
However, the government is threatening to withhold approval of the new diesel, because somehow they see it as an incitement to inflation. Or maybe because it is viewed as a Fat Cats' fuel, intended for all those diesel Audis and Mercs and Beamers you see zipping through red lights on the wrong side of the road.
Or possibly it is because the guv thinks that this new diesel will decrease supplies of agricultural diesel, which is already in spot shortages around the country. That means that the spring pIanting may be inhibited, which would cut down on the government's big budget surplus, which it is using to hire more and more government employees and to subsidize things like diesel fuel for buses. It is so complicated to manage every aspect of a large economy when there is so much of it you just don't get. It's like that carnival prairie dog game - you bonk one of them down into his hole, and another one pops up somewhere else.
