With the contribution of the increases in electricity and gas, inflation is expected to continue above 5% in June

The energy ministry instructed public service regulators to raise tariffs this month. It will be 20% in the case of gas and 17% in electricity. This increase in “regulated” prices (as defined by Indec) it will affect the measurement of June inflation.

Although households will pay these increases in July (when June bills expire), Indec CPI has been recording the increases since the month they were validated. Economists disagree on the impact these increases will have on the June reading. They place them between the 0.5% increase in overall CPI and 1% in that indicator.

Most economists agree that June inflation will not drop below 5%. They believe that there is already an installed inertia, increase of other regulated (i prepaid drug bills will increase by 10%for example, delays in private tuition hikes, payments to private household staff) and other “folder” increases, such as fuel.

For Lorenzo Sigaut Gravinafounder of the consulting firm Equilibra, of which he is also director of Macroeconomic Analysis, the increases in electricity and gas will contribute “less than half a point to the CPI. The Economist Fernando Marul, partner in FMyA, projects instead of rates will represent 1% in June CPI. Marull estimates that June inflation will be 5%.

Among the regulated, there is a lot of attention to what can happen with the oil companies. Fuels rose 11% in May, but it is not known what can happen in June. The decoupling of local and international fuel prices is important. Naphtha grew in the country less than half than in major countries (the United States or European Union members), measured in dollars.

YPF was always leading the gains, but in May they were led by Axion and Raizen (Shell), with YPF retiring afterwards. An “extra large” weekend is coming, in which there is usually an increase in fuel consumption. In stations they see it as an opportunity to apply a hike and leave behind the lag in pump prices recognized by the oil company. YPF did not confirm this possible increase for the next 48 hours.

Among the increases already planned there is a 15% re-composition of the salaries of domestic staff.

In public utilities, the electricity regulator Enre has already ordered distributors to pay more for the electricity they consume. The transfer of this re-composition to customers is envisaged, at least in the case of Edesur and Edenor.

Enargas also promised to raise (the price of gas) ordered by the Secretary of Energy. But he’ll do a consultation first, which could take him into the next month.

In July, the water and sewage service will increase by 20%. It is part of a two-part climb (the other will be in October).