Consolidation of power by economy minister

Sergio Massa has announced a shake-up of the country’s energy leadership, removing top allies of Vice-president Cristina Fernández de Kirchner as the government prepares to cut electricity subsidies.

Flavia Royón will take over Monday as Energy Secretary, replacing Fernández de Kirchner’s ally Darío Martínez, Massa said in a tweet. Santiago Yanotti, Federico Bernal and Cecilia Garibotti will be Royón’s undersecretaries, he said.

The move puts one of Argentina’s most politically sensitive offices under Massa after he took over the Economy Ministry. Argentina spent close to US$11 billion in energy subsidies last year and the government has agreed to scale back payouts to reduce the fiscal deficit as part of its deal with the International Monetary Fund.

“Our goal must be energy sovereignty and the transformation of Argentina as a power in this sector,” Massa said.

Martínez, who confirmed his exit in separate tweets, was often at odds with former Economy Minister Martin Guzmán, who resigned in early July citing lack of political support. The energy officials close to Fernández de Kirchner resisted Guzmán’s attempts to remove subsidies on utility bills that would translate into higher prices for consumers.

Raising utility rates poses deep political costs in Argentina, where a large portion of the population equates electric and gas bills to taxes.

Massa, one of the leaders of the ruling coalition governing the country since late 2019, took over with more political clout than his predecessors. In his first announcement on August 3, he confirmed utility rates would go up and those receiving subsidies would need to limit energy consumption.