Liquefied petroleum gas: new regulation

Decree No 1539/2008, published in the Official Gazette on September 23, 2008 (the “Decree”), regulates the creation of the Trust Fund (the “Fund”) established by Law No 26,020, whose purpose is the protection of low income users’ residential consumption of liquefied petroleum gas (“LPG”) and the expansion of gas networks.

The Fund is aimed at financing the compensations for the LPG sales performed at lower prices to low income residential users, in containers of 10, 12 and 15 kilograms.

The patrimony of the Fund will consist of:

(i)            the resources from the sanctions regime set forth in Law No 26,020;

(ii)           the funds allocated by the Budget Law (“Ley de Presupuesto”);

(iii)           the funds obtained within special credit programs to be agreed with the relevant national or international agencies or entities;

(iv)          the specific contributions that the Secretariat of Energy, acting as enforcement authority, agrees with the operators of the activity;

(v)           the contributions performed by natural gas producers under the agreement signed on September 19, 2008 (not published yet).

The Fund’s patrimony shall be destined to pay the compensations that the Fund’s beneficiaries (production and fractioning companies wholesalers of LPG containers of 10, 12 and 15 kilograms) are entitled to collect in order to finance the acquisitions of contained LPG.

Furthermore, the Decree created the “National Residential Consumption of Contained Liquefied Petroleum Gas Program” whose purpose is to establish the conditions for the LPG containers to be acquired by residential users at a fixed differential price. In this regard, the Decree instructed the Secretariat of Energy, as the enforcement authority, to announce the necessary measures for its implementation and performance.