The Government analyzes a removal of subsidies generalized for electricity and gas to those who have a car or motorbike less than 5 years old. Until now the same thing happened but with vehicles less than three years old.
The information comes from documents published Friday evening at Secretary of Energywhich will serve as support for the public hearing on tariff segmentation and subsidies, to be implemented Thursday 29 February. Here’s the new one”Basic energy basket“, a tool to achieve better efficiency and attention to state aid national to homes.
So far, the exclusion criterion in place for the segmentation launched in August 2022 is that people who have 3 or more motor vehicles under their name under 5 years old would have no subsidies and would be classified as “Tier 1” ( N1, “high income”) in their home.
Other property criteria that would imply the elimination of state subsidies are: if within the cohabiting group there are people with at least one plane or ship in their name or if they have it two or more properties registered.
On the revenue side, the Minister of Energy, Eduardo Rodríguez Chirilloanticipated this week that the State will only make a difference when families allocate more than 10% of your income pay for electricity and natural gas through the networks, which would lead to “energy poverty”. It remains to be seen how it would also apply to carafes.
The government promises to cross more databases validate the information provided by users requesting subsidies. For example, data on deceased persons, non-contributory pensions, pensions, pensions, social programs, employment, real estate, boat registrations, motor vehicle registers, aircraft, disability certificates and electrically dependent persons.
We will also look for data on the collection of unemployment insurance, social and prepaid works, health insurance, family allowances, “social housing”, companies and legal entities, students in the educational system, scholarships of study and debtors of the financial system registered by the Central Bank Authority (BCRA).
All in all, it will be a challenge to check millions of data points in just under two months in a country with a high mortality rate informality of work and with a system that, by logic, tends to generate incentives for under-declaring income and assets, as well as the current Register of Access to Energy Subsidies (RASE), in force for a year and a half.
The agreement with the IMF
The new basic energy basket should be defined in April and would be launched in May, as specified in Staff report of the International Monetary Fund (IMF). Energy subsidies are expected to fall between $2.5 billion and $3 billion this year, from the equivalent of 1.6 percent of gross domestic product (GDP) to 1.1 points.
Much of this adjustment will be achieved with lower energy imports thanks to the Vaca Muerta pipelineto the decline in international gas prices and local electricity generation prices thanks to the rains filling dams and increasing rates. Indeed, supply-side factors may alleviate the government’s need to pass the cut on to users.
Energy segmentation has been under discussion since 2012, when the economy expressed the need to concentrate subsidies, in a context of reversal of the twin surpluses into deficits and the beginning of the tightening of the dollar.
In 2021, the differences on this issue between the then Minister of Economy, Martin Guzmanand the Undersecretary for Electricity, Federico Basualdohe blew up the conduct of economic policy, until he took over as minister in August 2022 Sergio Massa and had a free hand to proceed with the elimination of subsidies for “high” income and/or wealthy families.
At a national level, there are 16,125,130 users of the electricity network (16.1 million), of which 5,327,173 (33%) are level 1 and do not benefit from concessions; 7,971,597 (49.5%) are level 2 – low income; and 2,826,360 (the remaining 17.5%) are level 3 – medium income. This means that 67% benefit from state aid to pay wholesale electricity prices, which cover more than 93% of the cost.
Source: Clarin
