Gas distributors have asked for a 190% hike. in the service they provide, the eventual impact of which on homes would be $1,500 a month. The recomposition was exhibited by the companies (Metrogas, Naturgy, Camuzzi, Gasnor, Litoral Gas) in a public public.
The companies offer this adjustment as a “transition tax”, that is, until there is a most comprehensive comprehensive fare review, which leaves the entire legal framework in order. a part from that redial immediately, which would be in effect from February 1 to April 30, after required quarterly adjustments equivalent to the change in the CPI over that period.
The regulatory body (Enargas) listens to the proposals, evaluates them and makes its own decisions. So far there was only two magnifications authorized to gas distribution company, one per year (June 2021 and March 2022). Since September, bills have increased but for another reason: the elimination of subsidies for the cost of gas itself.
The Government must establish how much customers will pay for the gas they consume – there has already been another public hearing on the matter – and the margin that distributors will get to provide that service. The Alberto Fernández administration suspended comprehensive rate reviews (RTIs) at the start of his term. From there, he generated “transitional” patterns. The companies have warned that the 2023 recomposition will also be a “transition”, that the increase claimed now will not deter them from future lawsuits over breaches of the concession agreement, specifically rate revisions.
“Since December 2019, when the accumulated CPI increased by 281%, while the distribution margin increased by 80% in that period”underlined Daniel Martini, executive director of the Gas Distributors Association (Adigas), which brings together all the companies.
«The distribution margin, i.e. the percentage of revenue on invoice that the distribution company retains, is at an all-time low in the last 30 years», observes Martini. “In December 2019, gas producers withheld 41% of invoice revenues, while distributors collected 24%. In January 2023, 57% of what is paid in the bill goes to gas, and only 12% to distributors”, he exemplified.
In their speeches, the directors of Metrogas, Naturgy, Camuzzi and others noted that their costs (salaries, cables, equipment, machinery) have increased at the rate of inflation -almost 300%-, while their revenues have increased by 80%.
The higher price of gas that consumers pay does not go to the distributors. These companies collect what customers pay and transfer the part that touches them – which is regulated – to the gas producers.
The government has given up on the idea of ordering electricity and gas tariffs until the end of the mandate. Whether it will continue with the removal of benefits (through segmentation).
The executive seeks to reduce public spending on both electricity and gas bills. In December, the Ministry of Energy presented four proposals in this direction: an increase in the cost of gas paid by households, the incidence of which on bills goes from 21% to 54%.
This increase will be added to the one already applied with the removal of the concessions made with the segmentation, in force in gas since September. Since then, the gas bill, which was paid $1,605 in June, has already gone up $1,000 and is now worth $2,600. This is not noticed because consumption decreases during the summer months. But if consumption were the same, the sectors called N1 -high income- would pay that amount.
If we add to this the recomposition requested by the distributors (which in Buenos Aires is on average an increase of 1,500 dollars), your gas bill will be increased from $1,600 to more than $4,000.
The Ministry of Energy is evaluating several scenarios: the most extreme is that high-income households (those labeled N1) and middle-income families (called N3) pay a surcharge of between 48% and 54% in 2023 for the recognition of most of the cost of the gas in the bill.
If the State decides to continue subsidizing 67% of the gas consumed by homes, it will have to spend almost 440,000 million dollars, according to a projection shown at the public hearing in December by Federico Bernal, undersecretary for hydrocarbons.
The first phase of eliminating gas subsidies will end in February. It was because of the segmentation. Higher income customers (referred to as N1) will already pay the full cost of the energy they consume.
Now comes phase 2. At this point we need to decide on the gas incentives for this year (2023) and the increases for distributors, who regret three consecutive years (2020, 2021 and 2022) of budgets in the red.
Source: Clarin
