A federal judge on Tuesday ordered the national government to stop withholding Chubut’s share of federal taxes, a victory for the provincial governor in a funding feud with the national government that erupted on Friday.

Chubut governor Ignacio Torres said the ruling meant the province would no longer interrupt oil and gas supplies, as he had previously threatened.

The national administration will appeal the ruling, news agency Télam reported. “In the next few hours, [the government] will analyze and define the legal instruments with which this appeal will be carried out,” a Casa Rosada source said. The National Treasury Attorney’s Office is reportedly considering taking the case straight to the Supreme Court.

On Friday, Chubut governor Ignacio Torres said he would stop delivering oil and gas to the rest of Argentina unless the national government released AR$13.5 billion in tax revenues. All but one of Argentina’s governors soon came out to back him. President Javier Milei called the warning a “Chavista threat” and claimed the national government was subtracting a debt owed by Chubut from the funds it was delivering.

The national government has axed a range of funds destined for Argentine provinces in recent weeks, triggering a dispute with the governors. Teachers in several provinces were on strike Monday after the government refused to pay into a fund that contributes to their wages, while a fund that subsidized public transport fees has also been axed. 

The Milei administration argues these cuts are necessary to eliminate Argentina’s fiscal deficit, but they are widely interpreted as retaliatory measures against the provinces after the bill collapsed due to a lack of support in Congress, which Milei blamed on governors.

Torres said that with Tuesday’s ruling, the conflict — and therefore the threat to cut oil and gas deliveries — was over. The decision was taken by the federal court in the city of Rawson, Chubut. Judge Hugo Sastre ruled in Torres’s favor in a lawsuit he filed on the matter last week.

Sastre’s ruling will remain in force until the national and provincial governments refinance Chubut’s debt, with a deadline of the end of the year. The judge also urged the parties to “find ways to cancel and/or refinance the debt, under reasonable conditions, which do not involve compromising the provincial government’s essential services.”

On Tuesday, after the ruling, Patagonian provincial governors called for negotiations with the national government to solve the conflict. 

The proposal was made at a press conference held in the National Senate. It was attended by the following governors:

• Ignacio Torres (Chubut)
• Sergio Zilliotto (La Pampa)
• Rolando Figueroa (Neuquén)
• Alberto Weretilneck (Río Negro)

Santa Cruz Governor Claudio Vidal was connected via Zoom, while Tierra del Fuego’s Gustavo Melella was absent.

“The issue has led to a false rift between the national and provincial states,” Torres said during the press conference. “Argentina needs unity and for us to reach an agreement, we do not have time for ideological discussions when we have to guarantee health and education.”

Milei did not comment on the ruling, but liked a post by an anonymous X user saying in all caps: “Unexpected: Chubut’s judiciary rules in favor of Chubut.”