Ricardo Torres, chief executive of Pampa Energia, said that there is little chance that Argentina’s government will allow energy companies to raise tariffs before the presidential election in October.

He said: “Negotiations to increase tariffs have mostly stopped. But we expect that, post-election, negotiations will begin to move again.”

Torres said that he is confident that the government will reform the current rate system because subsidies given to utility companies have risen to 4 per cent of GDP. He said: “The government is very aware of this and we will work together to find a way out of this situation.”

Argentina’s government froze utility rates during its 2002 economic meltdown and currency devaluation, and have not allowed tariff rate increases since.

Government officials have repeatedly said that the low rates help drive economic growth and are necessary to keep Argentine companies competitive in a global economy.

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