Minister Batakis confirmed his Economy team.
The future of the increase in electricity and gas tariffs, through the removal of subsidies to higher-income sectors, navigate between different interpretations. The Minister of Economy, Silvina Batakis, stressed that “we are working with the decree that the president has instructed the secretary of energy”. This standard indicated the procedure to be followed with the “segmentation”, that it is the increase in the price of public services that will, in principle, be applied to higher-income consumers.
But the decree referred to by Batakis established the creation of a “high-income” segment. The methodology for determining it was in the hands of the Undersecretary for Strategic Planning of the Secretary of Energy. That position was in the hands of Santiago López Osornio, an official who reported to Martín Guzmán. López Osornio has moved away and his segmentation model appears to have become obsolete.
Batakis was shown on Friday with two officials responding to Cristina Kirchner: Federico Basaldo, Undersecretary for Electricity, e Agostino Gerez, President of the Argentine Energy. It was on the occasion of the opening of the tenders for the civil construction works of the Nestor Kirchner gas pipeline. The official seemed to be supporting Basualdo, the vice president’s top contact on energy matters.
Batakis said it “There will be no changes” in the segmentation decree. “Resources are scarce. There is a good part of the population who are able to face the full payment of the services they are consuming, ”she said.
Basualdo has already developed a segmentation scheme, before the presidential decree. There, the removal of subsidies was aimed at the areas of 13 highly valued real estate neighborhoods in the Federal Capital, two halves of San Isidro and Vicente López plus private and countryside neighborhoods. The government would revert to such a scheme if Batakis intends to move forward. “The segmentation that Guzmán was looking for will not be used. Will work on a new model”Says an official source.
Guzman was looking for the removal of subsidies from households with incomes greater than $ 350,000 per month. That recipe did not like near Basualdo.
Companies believe that the differences in interpretation on the segmentation between Energy and Economy will be cleaned up behind closed doors. “What the minister orders will be done, but without contributing to an increase in inflation. observe the sectors of the ruling party.
President Alberto Fernández listened to the objections of former Economy Minister Martín Guzmán against Kirchner officials. Basualdo and Darío Martínez (the Energy Secretary) were targeted by the outgoing official. But Batakis ratified Martínez. And the ideologue of the future of tariffs is Basualdo. Other sectors of energy Kirchnerism I think the head of the executive branch is trying to confront him in Batakis with the bishops of the vice president in Energy. They don’t understand the president’s attitude.
“If there is one issue that Cristina (Fernández de Kirchner) is following closely, it is the question of tariffs,” complains a businessman who disagrees with Kirchner’s policy on the matter. “And that implies that Basualdo will continue to set the criteria,” he says. In considering him, the Secretary of Energy – Darío Martínez – is in charge of relations with the oil companies, while Federico Bernal (controller of Enargas) has lost consideration within that space.
The increase in electricity and gas will be 21% for the low sectors and 42% for the medium sectors.
Clarione early on Monday that Martínez would be confirmed by Minister Batakis.
The government has kept the amounts of the utility bills frozen in 2020 and freshly reared in 2021 (between 6% and 9%). Over the past year, it has allocated more than $ 11 billion to subsidize this situation, as the cost of gas and electricity is higher than what households pay for these benefits. In his initial settlement with the IMF, Guzmán promised to cut $ 3 billion from this year’s budget. To achieve this, ticket values had to be increased.
After the war in Russia, the IMF seemed to recalibrate some objectives of the program agreed with Argentina.
Energy subsidies were $ 11 billion in 2021. The estimate is that this year they will reach 15,000 million dollars. As of May, spending to keep rates low was $ 538 billion, more than double the same period in 2021.
To reduce subsidies, ticket values would have to be increased much more.
The Russian invasion of Ukraine triggered the prices of energy products. The LNG that Argentina buys in the winter went from US $ 8 per million BTU (the sector’s unit of measurement) to more than US $ 30. The same thing happened with diesel being imported for the production of electricity, as that fuel is used when there is no gas.
Martin Bidegaray
Source: Clarin
