Sun, Aug 26, 2007 - Page 11 News List

Royal Dutch/Shell accuses Argentina of discrimination

UNFAIR BLAME? The oil giant was hit by a series of fines for violations of a rarely invoked law that seeks to target hoarding of fuel and price fixing


Anglo-Dutch oil company Royal Dutch/Shell, whose top executives are under threat of arrest, accused the Argentine government of "discrimination" in a page-wide advert published on Friday in leading newspapers.

"The discrimination Shell is being subjected to is inadmissible," said company president Juan Aranguren in the statement, adding that the firm was unfairly blamed and fined for a diesel fuel shortage in the country.

The government of Argentine President Nestor Kirchner on July 2 announced a series of fines against Shell for violations of the rarely invoked 1974 Law of Supply that targets fuel hoarding and price-fixing.

In addition to fines, the law -- revoked in 1991 and reinstated in 1999 -- also calls for up to four years prison for law breakers.

Internal Commerce Secretary Guillermo Moreno recently took Shell to court over its alleged violations and requested that Aranguren and other top company executives be placed under arrest.

Moreno is to appear at a hearing before a judge next week to formalize the charges and name the people he wants to have arrested.

Shell, in its advert, doubted the Law of Supply's validity and complained that the government was singling them out.

"During June 2007, only Shell has been slapped with 32 fines of one million pesos each (US$312,500) by the Interior Commerce Secretariat, which is also seeking jail time for its executives," the company said.

Shell has been "arbitrarily" targeted because its sales in June this year, compared to June last year, "were far higher than the market average."

It said the shortages of diesel fuel, especially in Argentina's agricultural heartland, was temporary and was also experienced by other oil companies.

Of the roughly 800 government inspections this year, "64 percent involved Shell, whose share in the diesel fuel market is 13 percent."

This is not the first time Shell has been in Kirchner's crosshairs. In March 2005, he called for a nationwide boycott of Shell after the oil company hiked gasoline prices at the pump by as much as 4.2 percent.

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