Rioting in Chile over fuel subsidy cut

SANTIAGO, CHILE (Commodity Online) : Rioting over government cuts in fuel subsidies left two protesters dead, scores injured and at least 32 arrested in police counter action to restore peace in Chile's southern Magallanes region.

The fatalities occurred in an incident involving rioters and a runaway truck. Police said they were investigating who could be responsible for the deaths of two women, ages 19 and 23, who were run over by a truck. Several other people including a child were injured and reported to be in critical condition.

Chilean news media said the casualties might rise because of continuing unrest that cut off routes between regional capital Punta Arenas and the rest of Chile.

Traffic flow in and out of Punta Arenas was blocked by rioters and then police action to isolate pockets of protest and try and detain people suspected of leading the protests.

At least 32 people were arrested in early police action and more arrests were reported by Chilean news media but not confirmed. Some of those arrested were later released.

Discontent in the economically hard pressed southern region of Chile came to a head as the government announced reduced subsidies on fuel as part of an economy drive.

Chilean President Sebastian Pinera assumed the presidency amid optimism -- and a multibillion-dollar cash surplus -- but his plans were thwarted by a February 2010 earthquake and continuing effects of the global economic downturn.

Roadblocks, street fires and looting marked the first three days of unrest, Chilean radio reports said. Much of the urban center in the Magallanes region remained closed.

Response to strike action against the subsidy cuts remained patchy. The Asamblea Ciudadana Magallanes called for a strike to force the government to reverse its decision on reduced gas subsidies.

Despite early government warnings the armed forces would be called upon to restore calm, no army presence was reported during the demonstrations. Officials indicated the government decided to exercise restraint rather than force a confrontation between the protesters and the government.

Punta Arenas Gov. Vladimiro Mimica said he regretted the violence. "It was never the spirit of the people of the region to have violent demonstrations," he said.

But neither the regional government nor the administration of Pinera appeared in the mood for compromise.

Rodrigo Ubilla, Chile's undersecretary for the interior, told Mimica in talks the government wouldn't reverse its decision to cut gas subsidies for Magallanes and that the only official offer on the table was to implement more gradual price changes.

"We are open to making the gas hike measure more flexible," Pinera's spokeswoman Eva von Baer announced. She indicated there was room for negotiation on a possible compromise.