President Michelle Bachelet said Thursday she sent a letter to her Argentine counterpart saying Argentina's decision to sharply increase the price of natural gas it sells to Chile had badly damaged the "relations of trust" between the two countries.
Minutes before flying to Peru to attend the inauguration of President-elect Alan Garcia, Bachelet told reporters that Chile is prepared to continue to work in "common tasks" with Argentina but "hard work will be needed to restore relations of trust and the strategic relationship" between the two neighbors.
Chile imports more than 17 million cubic meters (600 million cubic feet) of gas from Argentina daily.
On Monday Argentina raised the price for the gas to between US$3.40 and US$4.80 per million British thermal unit - up from US$2.50 and U$2.80.
Argentina ordered the price increase in response to a similar increase in the price that it pays for gas imported from Bolivia, which nationalized its natural gas industry on May 1. Argentine officials said they were simply passing on the Bolivian price increase.
Argentina announced the increase just three days after Bachelet discussed the subject with Argentine President Nestor Kirchner during a summit of South America's Mercosur trade bloc in Cordoba, Argentina. Bachelet on Thursday told reporters the price increase was not in line with what they had discussed.
"We have indicated that disappointment exists in Chile in the wake of what has happened, which is not in line with the strategic relationship that has existed through several governments of Chile and Argentina," Bachelet said. The text of the letter sent by Bachelet to Kirchner was not made public.
Chile's conservative opposition had repeatedly urged Bachelet to take a firm stance before Argentina on the gas issue.
Argentina, Chile's main supplier, has repeatedly reduced or suspended the supply of natural gas to Chile in recent years, steps Chile says violate agreements between the two countries.
In addition, Kirchner has ordered an additional tax on gasoline sold to vehicles with Chilean license plates, which Bachelet described as discriminatory and contrary to Latin American integration efforts.
Chile plans to sharply reduce its reliance on natural gas from Argentina. Last year, construction began on a regasification plant at Quintero, 140 miles northwest of the capital of Santiago, that will turn imported liquefied gas into natural gas.
