Even though winter hasn’t started yet, homes are preparing for the cold months. The amount they will allocate to gas bills can have up to 30 variations: it will depend on the income of each family group, the city in which they live and their level of consumption. Due to the subsidy removal and segmentation, bills will rise 180% from last winter as 2.7 million customers lose state subsidies.
The Government has divided public service customers into three categories: high income (N1), low income (N2) and middle income (N3). For the former, the increase in gas will be 180%, for those with fewer resources it will reach 50%, and for the “media” it will be 100%. Each ticket will be different depending on how each customer was in the segmentation.
But, beyond that, there is another complexity. Argentina heavily subsidizes the cities of Patagonia, because its gas consumption is much higher than the national average. It’s because it has low temperatures for a greater number of days than in Buenos Aires, for example. In this way a house in Santa Cruz or in Tierra del Fuego can require up to 7 times more gas than Buenos Aires, and still pay less than in the country’s capital.
Patagonian customers are protected by a regime called “cold zones”. In 2021, non-Patagonian cities were added to this mechanism. They are found in the provinces of Buenos Aires, Santa Fe, Córdoba, Mendoza, San Juan, Salta and San Luis. They are assumed to be conurbations with colder than average temperatures. And the distributors of those premises must make a further discount, subsidized by the state.
“When it was sanctioned, gas bills were so low that no one noticed. But now that the amounts have been adjusted, distributors and customers will start to feel the brunt of these discounts,” says an industry executive. “Extending the cold zone law to places like Córdoba makes no sense. This extension must be repealed “There are already places where there is no gas that also ask for benefits because they consume a lot of light. Everything is unbalanced”, they argue at the Alem Foundation, an energy space within radicalism, which is part of Together for Change.
40% of households connected to the gas network were classified as “high” income. 36% correspond to the most backward segment. 24% are in the middle class out of a standard 6.8 million customers, according to government data, each of these customers will pay differently. And this also varies depending on the location: there is a gas price in Buenos Aires, another in the provinces of the “cold areas” (such as Santa Cruz, Chubut or Tierra del Fuego) and a third in the “extended cold areas”, as as in the Rio Cuarto (Cordoba).
To this we must add that there are also different tariff categories, depending on consumption. A Metrogas R1 customer pays a flat $800 monthly fee. On the other hand, a customer called R3-4 pays $3,600 a month for this concept, or nearly four and a half times as much. By the law of cold areas, an R1 house has a discount of 70% compared to Buenos Aires in the cities of Patagonia and 50% in the extended cold areas (distributed in the cities of Buenos Aires, Santa Fe, Córdoba, Mendoza , San Juan, Salta and San Luis).
“The segmentation, the place of operation (whether it is within the original or expanded cold zone), the amount of consumption. It is almost impossible to find two users who pay the same amount for a gas bill. There are more than 30 different prices,” reflects a distributor. “It’s a tangle,” they add in another company.
In Buenos Aires, each cubic meter of gas costs between $47 and $58, depending on the amount consumed. The greater the demand for gas, the greater the quantity. This is not the case, for example, in the Camuzzi Gas Pampeana concession, which covers the interior of the province of Buenos Aires and La Pampa. The cubic meter consumed within the province of Buenos Aires costs between 43 and 45 dollars (less than in Buenos Aires), while in La Pampa it ranges from 24 to 30 dollars.
In Camuzzi Gas del Sur, the company’s other concession, the tariff provides for 10 variations depending on the city, plus two more due to segmentation. That distributor must issue tickets with at least 30 different amounts. A consumer who consumes a lot in Tierra del Fuego pays a fixed fee of 2,400 dollars (1,200 dollars less than in Buenos Aires) and 20 dollars for each cubic meter consumed. In Buenos Aires, that same molecule costs $58.
An Ecogas customer, the distributor for Córdoba, La Rioja and Catamarca, pays for gas a little closer to that of Buenos Aires than to that of Patagonia. But there are some localities that have entered the law of “expanded” cold areas. If so, they have a 50% discount.
Gas distributors were a business in the 1990s. British Gas came to pay US$75 million for a 25% stake in Metrogas, which valued the company at US$300 million. The value of those companies on the stock market has dropped. Spain’s Naturgy seeks to divest its operations in the country, so far with no luck. Camuzzi’s controllers, who were also looking for investors in Mauricio Macri’s government, have resigned themselves to having to wait to see if they will again attract foreign interest.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.