Uruguay Upset with Argentinean Energy Policy

The Uruguayan government is upset with the administration of Argentinean President Cristina Fernandez because it has delayed authorization for Paraguayan electricity to transit Argentinean territory to energy-poor Uruguay.

Montevideo will continue to press to obtain the authorization, but pragmatists in the Uruguayan government have admitted off the record that it does not expect permission to be granted during the southern hemisphere’s winter season because of current high levels of energy consumption.

Speaking on condition of anonymity a Uruguayan government official labeled Argentina’s actions as an unjustified "blockade" without a legal basis, Montevideo’s El Observador reported.

Uruguayan analysts speculate that the dispute was one of the main reasons why President Fernandez did not attend the recent Mercosur summit held in Paraguay, but the Argentinean Planning Ministry denied it.

Uruguay’s El Observador reports that Uruguay currently has no energy "deficit" and therefore does not depend on energy imports to meet its domestic electricity demand and that Uruguay will not file a complaint with Mercosur's tribunal for the settlement of controversies, as there are currently no Mercosur regulations that relate to the impasse. Seeking to diversify its energy options, Uruguay’s state owned power company UTE has recently been discussing partnering with Brazil’s Eletrobras over jointly investing in wind farms in the region.

By. Charles Kennedy, Deputy Editor OilPrice.com