835.796/183: Telegram

The Ambassador in Argentina ( Armour ) to the Secretary of State

1052. Department’s 688, September 24, 11 p.m., and 703, September 26, 7 p.m. As mentioned in Embassy’s telegram No. 981 September 16, 10 p.m. I took up this matter with the Under Secretary for Foreign Affairs telling him that if Y.P.F. proceeded with any such negotiations our Government might find it necessary to shut off ethyl supplies for Y.P.F. or even place it on our Proclaimed List. The Under Secretary assured me that he would investigate and report as soon as possible, and I shall again take up the matter at earliest opportunity. He seemed much concerned that Y.P.F. might be placed on our Proclaimed List remarking that our Government surely could not consider taking such action against a semi-official Argentine organization. While of course I did not tell him so I feel that such action if seriously considered should be taken only after careful thought and all other alternatives exhausted since Y.P.F. is in a position to retaliate against American companies.

It is correct that importation of petroleum products is now under direct supervision of Ministry of Marine instead of Y.P.F., as formerly, but inasmuch as the latter is a semi-official agency, it still exercises strong influence over petroleum policy.

Both Standard and Y.P.F. make direct importations of ethyl fluid for their respective consumption. Local office of Ethyl Associated Company estimates present Standard stocks total 1,325 gallons or approximately 10 months’ supply. Y.P.F. stocks estimated at 5,554 gallons of which 4,230 gallons represent a reserve which is supposed to be maintained for army use. Y.P.F. monthly requirements calculated at 300 gallons. Local ethyl representative understands Y.P.F. now producing 105,680 gallons 87 octane and 52,840 gallons 80 octane aviation gasoline per month.

Regarding Department’s telegram No. 703, Embassy has not yet had suitable opportunity to take up the matter directly with Y.P.F. Statement that Y.P.F. has never sold aviation gasoline to Lati is believed incorrect as Intava maintains that weekly Lati planes are served by Y.P.F. General manager of Y.P.F. recently told local general manager of Standard that rumor regarding 100,000 liters monthly [Page 346] to Lati was absurd but admitted that Y.P.F. was supplying Lati with normal monthly requirements in Argentina. Embassy endeavoring to obtain expression from Y.P.F. official on this general matter at earliest opportunity.