World

Stranded Tourists Freed as Chile Meets Protester's Demands on Gas Prices

Protesters demanding rollbacks of planned gas price increases had paralyzed Chile's Antarctic region, stranding hundreds of foreign tourists, but on Tuesday officials agreed to nearly all of the protesters demands.

Mining Minister Laurence Golborne, whose warm manner and skilled management of the rescue of the miners made him highly popular elsewhere in Chile, was given the additional job of energy minister this weekend and sent by President Sebastian Piñera to end blockades that stranded hundreds of foreign tourists.

Golborne found himself surrounded by about 1,000 angry residents who chanted anti-government slogans as they converged on a radio station where he was being interviewed early Tuesday. Riot police had to escort him out of the building through a tunnel of shields, his head tucked beneath an officer's arm.

But hours later, after meeting with more protest leaders, Golborne announced a deal — he called it a "work of consensus."

Plans by Chile's state-owned National Petroleum Company (ENAP) to raise methane prices by 16.8 percent were rolled back to 3 percent, roughly equal to inflation. The government also abandoned plans to sharply reduce the amount of subsidized gas to each customer, promised subsidies and discounts to the neediest of the Magallanes region's 158,000 residents, and is making more funds available to weatherize homes as well.

More On This...

The deaths of two women who were knocked into a bonfire last week when an unidentified trucker rammed through a blockade radicalized many residents, and Golborne was seen as losing some maneuvering room when Interior Minister Rodrigo Hinzpeter threatened Sunday night to invoke a "state security" law that could ultimately involve sending in soldiers to dismantle blockades and jail protesters.

Punta Arenas Mayor Vladimiro Mimica said the interior minister's threat was like trying "to put out a fire with gasoline," but Hinzpeter took credit for helping to resolve the crisis. "A few hours after our government invoked the State Security Law, we reached an accord," he said.

Pinera in effect praised both ministers, saying the deal was possible because the government is open to "dialogue and to search for agreements to resolve problems," but at the same time citizens need to respect "the public order and the security of people."

The strike cost the region more than $4 million in tourism income, industry leaders said as trucks, buses and taxis in Punta Arenas blocked access roads to the airport, seaport and highway. The city is a jumping-off point for destinations across southern Chile and Argentina.

The last of some 1,500 tourists stuck in Puerto Natales after visiting the Torres del Paine park had left by Tuesday, and the first fresh wave of visitors was getting in, said Juan Vargas, who runs a travel agency in the city.

Golborne may have fixed the immediate crisis, but solving the region's long-term energy needs may prove more complex than extracting men from a collapsed copper and gold mine.

ENAP is nearly $4 billion in debt and heavily subsidizes energy prices in far southern Chile, where frigid temperatures require more consumption and the cost of living is 30 percent higher than elsewhere in the country.

The Magallanes region is the only place in Chile, which imports 93 percent of its energy, where natural gas is extracted.

ENAP sells 60 percent of this methanol to Methanex, a Canadian company, to defray the cost of subsidizing the other 40 percent to power the region's homes and industries. Developing more reserves is a priority because the current supply is due to run out in just seven years.

ENAP general manager Rodrigo Azocar said the subsidies must be removed to increase profit margins and thus incentives to develop more local gas supplies.

But local union and civic leaders suspect the company also wants to reduce subsidized consumption so that it can sell more gas at higher prices to Methanex.

Pinera — who promised during last year's presidential campaign not to raise energy prices — has said the long-term solution is to develop Chile's energy infrastructure, with renewable sources and a better transmission network. But this could take many years.

While polls suggest Golborne has the best shot at succeeding Pinera three years from now, the new energy minister could see his popularity plummet if he doesn't find a long-term fix.

"What Pinera is doing is seeing to it that all of his ministers have to bear political costs," Navarrete said Bernardo Navarrete, a political analyst at the University of Santiago.

Based on reporting by the Associated Press.

Follow us on twitter.com/foxnewslatino
Like us at facebook.com/foxnewslatino