The Government authorized an increase of around 460% in gas tariffs for homes between March and April, which in some cases can exceed 600% for industries and businesses. It came into force on Wednesday 3 April.
The reason for these sharp increases is the precarious fiscal situation in Argentina, the high public spending on subsidies and tariff arrears accumulated over the last 5 years while inflation exploded.
Below, the 5 keys to the increases already made official and how the situation will continue for the rest of the year.
1) Natural gas through the network
The rate increase will come into effect from Wednesday 3 April. For families in the City of Buenos Aires with the most representative consumption, this implies increases of between 461% and 683% compared to March, according to each segmentation level.
At a national level, the average adjustment is around 350%, according to information provided in confidentially The companies.
For the businesses and industriesadjustment can be even oldersince to date they have already lost all subsidies, as have high-income families.
2) Electricity (light)
As for electricity, The Government has completely eliminated subsidies since mid-February for all N1 and non-residential users (small businesses and industries, buildings, hospitals, schools, clubs, etc.) of the country.
In the Buenos Aires Metropolitan Area (AMBA), Increases for families ranged from 90% to 300% depending on each consumption category and segmentation.
3) Why rates increase
The adjustment of electricity and natural gas tariffs by network is motivated by the government’s need to reduce public spending, seek financial and fiscal balance and a primary surplus equivalent to 2% of gross domestic product (GDP), against of a 3% deficit in 2023. This is an adjustment of 5 percentage points or $30 billion. Energy would contribute 0.5 points, from 1.6% to 1.1%.
Likewise, specialists believe that energy is expensive and that real costs must be paid to encourage efficient consumption.
4) How is the rest of the year going?
From May, Electricity and gas tariffs will be indexed to changes in wages, inflation and even the cost of construction.
Furthermore, a gas will increase the wholesale price which will be passed on to the bill for N1 families and the rest of non-residential users. In the meantime, There will also be another jump in the wholesale price of electricity in Maywhich would be close to 60%.
5) A peak in winter, up to 1,229% more expensive
According to specialist Julián Rojo, In winter the gas increase can reach between 999% and 1,229% (they multiply between 11 and 13 times) compared to March values, a signal for users to take care of energy.
Source: Clarin
