Rate increase in two years. Regularization and unification of the regulators of electricity and gas concessions (Enre and Enargas). Review of all ongoing projects. He Istituto Generale Mosconi and Energy Commission of the Alem Foundation produced a document with energy policy recommendations for the period 2023-2027for the next government. His proposals are designed for radical candidates, who are part of Together for Change.
“The recent removal of electricity subsidies to N1 (high-income) sectors will likely help the government meet the goals of the agreement with the International Monetary Fund (IMF),” according to Alejandro Einstoss, chief economist at the Mosconi Institute. The Ministry of Economy has promised to reduce the weight of energy subsidies in the fiscal deficit. It is expected to go from 2.4% of GDP (about US$12.5 billion) recorded in 2022 to 1.9% of GDP (about US$10 billion) in 2023.
“For now, it seems that this reduction is taking place, but it will depend a lot on the evolution of inflation and the exchange rate,” according to Einstoss. “Between 85% and 90% of the cost of energy is in dollars. A devaluation of the peso against the dollar would imply that these projections (to meet the IMF target) could be complicated.
The Government has decided to leave the adjustment of electricity and gas tariffs for middle-income sectors to the next administration. Einstoss appreciates it that process will take two years.
The fourth term of Kirchnerism “repeats the mistakes of the previous three”, as Jorge Lapeña, Gerardo Rabinovich, Nicolas Gallo, Diego Grau and Pedro Albitos have explained. Almost all have had some passage in the public service, love politics and are passionate about radicalism. “In these three and a half years they have done the same thing as before: they have frozen rates, they have put companies in difficulty, they have granted subsidies which support the issue and generate more inflation”, Einstoss points out. Together with Julián Rojo, they are the two economists who prepare technical reports every month.
“You need to make a rate review and grant targeting. The north will be for the vulnerable sectors, who must prove their condition either through databases that the national state has or through a system of spontaneous presentation with the assignment of benefits conditioned on prior verification of livelihoods”, reads the document .
“The rest of the demand will have to follow a recovery path that ends with prices that recognize the entire cost of the energy consumed”; stands out. They suggest an “Extraordinary Tariff Review for electricity and gas in the first 180 days”.
“The next leadership must have an energy plan, which has the support of Parliament”, defines Lapeña. The former undersecretary for energy and president of the Mosconi Institute says it is necessary repeal the extended “cold zone” law.. This law provided for a discount advantage on gas for the provinces of Patagonia, which are the largest consumers and also producers of this resource. But later it was expanded and taken to different parts of the country. “It is based on technically irrational subsidies because they are socially useless and because they conspire against energy efficiency,” criticizes Lapeña.
“There are works that to date have not demonstrated their integral feasibility,” says Lapeña and there he places from Yacimientos Carborníferos Río Turbio (YCRT) to the hydroelectric plants of Santa Cruz, passing through the gas pipeline of northeastern Argentina.
As for the end of hydroelectric concessions – some of which are due to expire this year – they propose that they return to the national state. “A new tariff system will be established for the remuneration of the energy produced by hydroelectric plants… The state will enter into operation and maintenance contracts with the private sector for each of the plants”, is the position of the Energy Commission of the German Foundation.
Source: Clarin
