Chubut Province Governor Ignacio ‘Nacho’ Torres has vowed not to back down from his threat to halt oil and gas deliveries to the rest of Argentina if his energy-rich region doesn’t start getting its rightfully-owed tax revenues.
“The provinces are an integral part of the nation and deserve respect. No one can subjugate or blackmail them with a reduction in the allocation of public funds which rightfully belong to them,” Torres wrote in a social media post Friday.
Torres accused Buenos Aires of “illegally” withholding some 13.5 billion pesos-worth in tax revenues, or over a third of Chubut’s tax revenues. “If they do not comply with the Constitution and do not transfer the funds to the residents of Chubut, then Chubut will not supply its oil and gas,” the governor promised.
Torres is not the first governor to make such a threat. Last month, Rio Negro Deputy-Governor Pedro Pesatti similarly warned that his province would stop exporting energy if President Milei didn’t stop threatening to leave governors who don’t support his radical reforms “without a single peso.”
Milei and the federal government have responded to Torres’ threats by saying that the withheld money was debt to the provincial development fiduciary fund, and promising to charge the governor under Section 194 of the Criminal Code, with carries the penalty of three months to two years in prison, for “preventing, hindering or interfering with the normal functioning of transportation by land, water or air, or public services,” including communication, water, electricity and energy.
“Mr. President, I’m not afraid of you,” Torres responded, giving Milei until Wednesday to release the funds and reiterating that “not one more barrel of oil will leave Chubut” if his demand wasn’t met.
“We are not going to give in to their insults, threats or pressure,” Torres added, stressing he would not allow Buenos Aires to trample “on our heads.”
“Nachito, don’t create drama, we are going to resolve things in court,” Milei said in a social media post.
Governors from across the country of all political stripes have lined up in solidarity with Torres.
“The governors of Together for Change express their full support…for the governor of Chubut Ignacio Torres in this difficult moment. The national government must comply with the Constitution and urgently send the shared resources that belong to the province. Not complying with the law and the agreements between the [center] and the provinces does not affect governors, but the 50 million Argentinians who live in the 24 jurisdictions of the country,” the liberal center-right political alliance, founded by former Republican Proposal president Mauricio Macri, said in a statement.
Axel Kicillof, the Peronist governor or Buenos Aires, warned last week that his region would challenge the “political and arbitrary” decision by the national government to cut funding. Ricardo Quintela, a fellow Justicialist Party politician and governor of La Rioja, said Milei’s policies were creating a “social catastrophe” in the provinces. “When the president says he is fighting against the political class, that’s not true; the consequences of that anger and that fight fall on the workers,” he said.
The Milei administration has made promises to slash government spending, devaluing the peso by over 50 percent against the dollar, cutting the number of ministries by half, and instituting a series of measures to deregulate the economy. His government canceled Argentina’s planned entry into the BRICS bloc in favor of closer ties with the United States.
The reforms, designed to address Argentina’s years-long struggle with economic malaise, have resulted in a sharp uptick in poverty levels, with a recently published study estimating that 57 percent of Argentinians, or over 26 million people, are now living in poverty (up from 49 percent in December) – a level unseen in two decades.