Crude Oil Commercialization in the Domestic Market

In January 2017, the Federal Government executed the Agreement for the Transition to International Prices of the Argentine Hydrocarbon Industry with producers and refineries of crude oil with the purpose of generating a gradual convergence of the price of the crude oil barrel traded in Argentina towards the international price. This agreement was suspended in October 2017 as the Brent crude oil price exceeded US$55/barrel (bbl) for 10 consecutive days and, since then, the domestic price for the barrel of crude oil to be used as raw material for refining and gas pump prices were determined based on the domestic supply and demand.

However, following the exchange rate (FX) volatility experienced in August 2019, Necessity and Urgency Decree (DNU or Decreto de Necesidad y Urgencia) No. 566/19 was issued on August 16, 2019, which fixed the barrel price agreed between producers and refiners in the domestic market as of August 9, 2019, and valid until November 13, 2019, considering a reference Brent price of US$59/bbl and a FX of AR$45.19/US$, being updated until reaching AR$51.77/US$.

Liquid Hydrocarbons Export Duty

As from September 2018, Executive Orders No. 793 and 865/18 of the National Executive Branch provide for an oil export duty of AR$4 per exported US$, with a maximum 12% rate. However, the Solidarity Law (Law No. 27,541) established that this rate (pending implementation) should be lower than or equal to 8% of the taxable value.