(Adds quote from energy minister, context)
By Caroline Stauffer and Hernan Nessi
BUENOS AIRES Oct 7 Argentina's austerity-minded
government announced a sharp increase in home heating gas prices
on Friday after previous efforts to cut consumer subsidies that
kept prices low were criticized and challenged in court.
Prices will increase between 300 and 400 percent for home
heating gas and up to 500 percent for companies, according to an
announcement in Argentina's official gazette.
"This will decrease imports and subsidize only those in
need," Energy Minister Juan José Aranguren said at a news
conference, explaining the subsidy cuts would be gradual.
President Mauricio Macri, who took office in December, is
trying to fulfill campaign promises of undoing the previous
administration's heavy market controls without sacrificing
public support ahead of congressional elections next year.
Macri slashed natural gas subsidies early in his term in a
bid to rein in the budget deficit and attract investment.
Heating bills then soared during a particularly cold
Southern Hemisphere winter, prompting public protests. Macri
then told Argentines to wear warmer clothes rather than turn up
the heat to support austerity measures, which spurred widespread
mocking on social media.
The president later promised to cap home heating gas hikes
at 400 percent but the Supreme Court ruled in August that
consumers must have the opportunity to weigh in before price
increases were applied.
The hearings were held last month. Government supporters say
Argentines became accustomed to generous subsidies that made gas
prices lower than elsewhere in Latin America.
A reversal of the price increase led to lower consumer
prices in August, with inflation that had been seen around 40
percent on an annual basis slowing to just a 0.2 percent monthly
rise. Raising gas prices will likely spur inflation again.
Finance Minister Alfonso Prat-Gay said last month the
delayed subsidy cuts were one reason the government announced a
higher-than promised budget deficit of 4.2 percent of gross
domestic product for 2017, rather than 3.3 percent as previously
(Reporting by Hernán Nessi; Writing by Caroline Stauffer;
Editing by W Simon and Bernadette Baum)