Chile summoned Argentina’s chargé d’affaires on Thursday after the state-backed supplier CumbreSur Gas cut deliveries through an Andean pipeline by 38%, deepening a dispute over a new inflation-linked surcharge. The row began when a baker in the Chilean city of Los Andes noticed that her September gas bill had jumped by 54% despite using less fuel.
The Chilean energy ministry says the disputed charge affects 186 commercial customers and could add 21 billion pesos (about €20 million) to bills through December. Officials have suspended approval of extra gas purchases from CumbreSur while they seek a written price explanation; Argentina says Chile has not paid the full amount due.
One bill, two price formulas
Katharina E. Haller, who owns a bakery near Los Andes’s central market, spotted the increase while sorting invoices on Tuesday morning. The bill’s consumption figure was lower than August’s, but a charge marked “regional adjustment” had risen sharply. She called her supplier and learned that the same formula had appeared on bills sent to other businesses.
The adjustment is tied to Argentina’s producer-price index, which has climbed as inflation there accelerates. Chilean officials say a 2024 supply agreement capped annual increases at 8%; CumbreSur argues that the cap applies only to the base gas price, not the index-linked adjustment. Haller’s bill rose from 3.1 million pesos to 4.8 million pesos (about €4,600).
I thought the oven had eaten the difference. It was the formula on the bill.
Katharina E. Haller, bakery owner
Chile’s energy secretary, Andreas Baier, said the government had found “a reading of the contract that would make the ceiling meaningless”. He said the cut in deliveries had left Santiago with “less than a week to settle the price question before we must buy replacement gas at a premium”. Argentina’s energy undersecretary, Bohuš Šindlerová-Holuby, rejected Chile’s interpretation and said the index was “part of the agreed cost of keeping supply available”.
Short supply, higher stakes
The pipeline carries gas from Argentina’s Mendoza province across the Andes to central Chile, where it feeds industrial boilers and power plants. The reduction has not triggered household rationing, but the Chilean energy ministry says it is arranging replacement cargoes of liquefied natural gas. Those purchases could cost up to 30% more than contracted pipeline supplies, officials estimate.
For bakeries, laundries and small food producers, the timing is painful. Chile’s annual inflation reached 8.8% in August, up from 7.1% in May, according to official figures, and rising transport and food costs have already squeezed margins. Haller said she had raised bread prices by 100 pesos a loaf this week, but would wait before making another change.
Argentina says its revised charge reflects costs it can no longer absorb and insists the supply agreement allows monthly index adjustments. Chile has asked for an urgent meeting in Mendoza and warned it may take the dispute to a regional arbitration panel if deliveries remain restricted. The two sides have not announced a date for the talks.
The immediate test comes on Monday, when Chile’s gas regulator is due to decide whether to authorise more spot-market purchases. Haller said she had put the bill beside her flour ledger so she could track every increase. “I can change a price tag,” she said. “I can’t change a number written into an agreement between countries.”
