Tariffs have doubled their impact on family income in just 3 months

THE families of the metropolitan area of ​​Buenos Aires e They spend an average of 11% of their income on utility rates such as transport (trains, buses, subways), energy (electricity and gas) and water.

The percentage doubled in just 2 months (December to February), when the increases in electricity, buses and trains were implemented, which remained stable in March, due to the freezing of natural gas rates for grid, water and sewer, according to a report from the Interdisciplinary Institute of Political Economy (IIEP) of the University of Buenos Aires (UBA) and Conicet.

Economists Alejandro Einstoss and Julián Rojo found that a family in the city or Greater Buenos Aires (AMBA) spends on average $75,429 to pay for utilities, when he had barely spent $29,487 in December.

At the beginning of Javier Milei’s presidency, Alberto Fernández’s tariff legacy meant that the impact of energy, transport and water represented only 6% of the average income. The ratio reached a peak of 12% in February, following cumulative increases of 410% in transportation in just 25 days (from January 15 to mid-February) and 99% in electricity, reflecting higher summer consumption.

The “denominator” salary he also did the other part of the work, with increases that have persisted for a long time below inflation.

According to the consultant Empiriadirected by the former Minister of Economy Hernán Lacunza, based on public data, In January 2024, for the first time in decades, the average formal salary was placed below the Total Basic Basket (CBT), which sets the poverty line.

Average earnings (RIPTE) have plummeted from over $900,000 – at constant prices this year – in 2017 to $555,269, while the poverty basket has remained relatively stable over this period and totaled $596,823 in the first month of this year. year.

If we limit attention only to the weight of energy services on wages, the IIEP shows that in March electricity and gas had an impact of 5% on the average remuneration of a level 1 (N1) family of the segmentation, high income o wealth, i.e. those who have not requested or renounced subsidies; while it is 1.5% and 1.4% for N2 and N3 respectively.

The peak in recent years was 5.6% in June 2019, at the end of Mauricio Macri’s presidency, when the rate freeze returned during the campaign, which lasted during the Frente de Todos government.

A definition accepted by specialists regarding “energy poverty“establishes that families’ electricity and gas expenses must not exceed the ceiling of 10% of their income. This formula is used by Government technicians to design the basic energy basketwhereby a reasonable consumption limit will be set based on the number of family members and the bioclimatic region in which they are located, as well as other criteria relating to ownership and travel and purchase history.

The national state will only consider that those who spend more than 10% of their income on energy and who meet the remaining criteria deserve and need subsidies, such as not having a car or motorcycle less than 5 years old, not having purchased dollars or other foreign currency in the last 3 months, not having traveled abroad to non-neighboring countries in the last 5 years, and having measured consumption on credit cards and virtual wallets, among others.

Through March 20, national government spending on benefits fell 70% year-on-year in real terms to $712,591 million and there was floating debt growth of $141,458 million, representing the difference between the accrual and payment of benefits.

Forward, The government plans to increase public transport fares in AMBA in April and is already delaying the gas increase from February to anchor inflation. Gas transportation and distribution companies have been informed that they will see increases next month and then monthly updates based on inflation and wage trends.

Furthermore, A new round of adjustments in the electricity sector is expected in May remove most subsidies for low- and middle-income families, as well as update wholesale electricity prices for high-income families, businesses, industries, buildings, hospitals, schools, clubs and public lighting.