Tax Charges on Natural Gas Consumption

Decree No. 2067 created a Trust Fund to afford payment of natural gas imports that were necessary to guarantee domestic supply. The Fund was to be comprised of the Decree 2067 Charges that would be paid by (i) users of natural gas transportation and distribution services; (ii) consumers who received natural gas directly from producers; and (iii) natural gas processing companies.

Resolution No. 1451/2008, issued by the Ministry of Federal Planning and Services, implemented the Trust Fund and instructed the Secretariat of Energy and the Gas National Regulatory Agency (“ENARGAS”) to set the values of the Decree 2067 Charges and their collecting agents.

Later, the ENARGAS enacted Resolution No. 563/08 which set the values of Decree 2067 Charges.

Resolution 1982 substantially increases the value of Decree 2067 Charges but maintains the values set forth by Resolution ENARGAS 536/2008 for the purposes of collecting from certain users. The users whose values are maintained will receive their invoices with an indication of the difference with the new Decree 2067 Charges referred to as “Consumer subvention”.

On the other hand, the users referred to by Section 3 of Resolution 1982 will have to pay the full Decree 2067 Charge. These consumers are non-residential users whose primary or secondary activity is listed in Annex II of Resolution 1982. Among the activities that shall pay the full Decree 2067 Charges are:

1. Extraction of crude oil and natural gas
2. Extraction of various minerals
3. Wholesale, retail and investment banking services.
4. Air Navigation Services
5. Passengers’ water transportation services
6. Services related to gambling and betting

In addition, on November 16, 2011, the Minister of Economy and Finances and the Minister of Federal Planning, Public Investment and Services announced in a press conference that as from December 1, 2011, 40 large companies will cease to receive subsidies in electricity, water and natural gas. According to newspaper articles, refineries, gas processors, oil companies, biofuel and agrochemicals producers, among others, would be included in this group of companies.

They also announced that, as from January 1, 2012, consumers of the wealthier residential neighborhoods (Puerto Madero, Barrio Parque and gated communities) will cease to receive subsidies.

The announcements made on November 16, have not yet been implemented by any published regulation with regards to natural gas. It has been said that an amendment to Resolution 1982 making the full payment of Decree 2067 Charges applicable to a broader section of the general public would be drafted by ENARGAS. However, such regulation has not yet been published.

As regards the above described legal framework, prior caselaw exists that has suspended its effects, and we understand that there are arguments to challenge it.