The 1996-97 Gas Price Review in Argentina
Author: Andres Gomez-Lobo and Vivien Foster Date: 4/1/1999 (PDF, 200KB)
This gas transport and distribution price review is of interest for several reasons. First, it is the first of its kind in Argentina, and one of the first in a developing country. The outcome of the process provides a test of the regulatory framework adopted by the Argentine government, and may influence regulatory reform in other parts of the world. Second, as the first such event, the 1996-97 review set a precedent for methodologies and approaches to be used in future utility price reviews in Argentina. Finally, the approach used to calculate the cost of capital--as well as the other parameters used to set prices--provide an interesting illustration of how theoretical and practical methods from regulatory practice in industrial countries can be adapted to developing countries, where data availability and other restrictions prevent a direct transfer of techniques.