The Argentine government has increased the amount of subsidies it gives to the energy industry, as record demand for natural gas and electricity strain the country's ability to satisfy it.

The government has allocated an additional 1.5 billion pesos ($381 million) to "ensure the supply of electricity" by increasing funding to the state energy company Enarsa and the wholesale power regulator Cammesa, according to a decision published Tuesday in the Official Bulletin.

Cammesa is reportedly billions of dollars in debt to energy companies to whom it pays subsidies each year.

Argentina froze most oil, gas and electricity rates across the board following its 2001-2002 economic meltdown. The price caps have kept energy prices here among the lowest in the world but have severely crimped revenue at energy and utility companies. To keep rates low, the government has been setting aside billions of dollars every year (about $6 billion in 2009) to compensate the companies for lost income.

But in recent years, operating costs have soared and demand for electricity has surged amid booming economic growth, making it more expensive for the government to keep prices down. That has led the government to spend more and more on energy subsidies.

Last week, cold winter weather led demand for natural gas and electricity to break records, pushing the government to ration gas to hundreds of industrial companies so it could guarantee the supply of gas to residential customers.

Planning Minister Julio De Vido says the country doesn't have any serious energy problems. But critics, including energy companies themselves and manufacturers, say the situation has become untenable and that the price caps and subsidies are tantamount to a "time bomb" that will have to be dismantled sometime soon.

A spokesman for the Planning Ministry was not immediately available to comment for this article.

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