Volume 43, Number 170,
July-September 2012
Energy Resources in Argentina:
Analysis of Income
Marina Recalde
OIL INCOME IN ARGENTINA:
PRELIMINARY ESTIMATE

Various authors have performed the calculation of hydrocarbon income in Argentina (Visintini, 1990: 98-115; Gadano and Sturzenguer, 1998: 75-115; Santopietro, 1998: 39-48; Kozulj, 2005: 42-45; unctad, 2005: 118; Mansilla, 2007: 103-114; Scheimberg, 2007: 20-23; Campodónico, 2008: 31-38). The difference between their results arises from the different methodologies applied and the use of varied information sources.

Methodology

In keeping with Kozulj (2005: 42-45), Mansilla (2007: 103-114), Scheimberg (2007: 20-23) and Campodónico (2008: 31-38), this study has used the net price methodology. This methodology is advantageous, as Repetto et al. (1989, in Santopietro, 1998:39) pointed out, as it makes use of available information and only requires the researcher to make a minimal number of assumptions. This analysis assumes the following:

  1. Private ownership of deposits and/or productive areas exists, and as such, the natural resource can be monopolized by the owner. In this way, part of the surplus generated by this productive activity can be transformed into a form of income, and said income, given the very definition of this concept, would belong to the owner of the resource.
  2. The morphology of the market is highly concentrated monopolistic or oligopolistic.
  3. Goods derived from hydrocarbon resources are essential to national growth and development, and present highly elevated income elasticity.8
  4. As a result of the three above assumptions, the oil industry is characterized by the existence of monopolistic prices that exceed their production prices.
  5. To analyze the rent differential, first we refer to the assumption that oil products are sold, just like any other merchandize, at the marginal social price of deposit production. In other words, a price equal to the sum of the cost of capital (value of constant and variable capital) plus a profit (determined by the general profit quota calculated based on total employed capital).
  6. The Organic Composition of Capital (occ) in the oil industry is equal to or greater than the average occ, but never less.
  7. It is not assumed that oil income presents a dr component and an mra component, different from the agricultural ra described by Marx (by assumption vi). These profits exceed the dr and are present for all deposits, including marginal deposits.

As such, total petroleum income can be defined as:

    TI = MR + dr eq(1)

Where:

TI: Total income.

MR: Income derived from monopolistic price. Other authors call it absolute income or scarcity income.

dr: Rent differential derived from deposits (or wells) of varying quality in different locations

8 According to the bp Statistical Review of World Energy 2007, income elasticity for world energy consumption from 2001-2006 was 0.4 for oil, 0.7 for natural gas, and nearly 1.2 for coal.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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