During the previous decade (2010 – 2019), and as noted in the 2021 Climate Tranparency Report, fossil fuel subsidies in Argentina peaked in 2015 and then declined steadily, reaching an historic low of US$5.3 billion in 2019.
“Over this period, most of the subsidies were directed to supporting the production and consumption of petroleum, followed by a natural gas production and consumption, and the consumption of fossil-fueled electricity”, the report reads.
Of Argentina’s US$5 billion spent on fossil fuel subsidies in 2019, 76 percent went to oil, Climate Transparency reported. “Although fewer dollars were spent than in previous years, the (2018) currency devaluation means that, every year, Argentina spends more pesos on fossil fuel subsidies”, the authors noted.
While the country introduced a 2018 carbon tax on liquid fuels, it did not tax natural gas, the most widely used fossil fuel in the country.
According to Energy policy Tracker data cited by Climate Transparency, Argentina allocated, at least, US$1.366 billion to fossil fuel energy in 2020, as part of its energy-related financing commitments and response to the impacts of the Covid-19 pandemic.
“This includes the earmarking of 25 percent of the revenue from the extraordinary one-off tax imposed on the wealthiest on the context of the Covid-19 pandemic, to support gas extraction and exploration by the state-owned enterprise, Yacimientos Petrolíferos Fiscales (YPF)”, the report said.
Furthermore, the fiscal contribution to the gas sector in 2020 was estimated to be some US$1.06 billion.