Sergio Massa wants to apply the increases in electricity, gas and water from next month

The program of the Minister of Economy Sergio Massa is to start applying the new energy, gas and water tariffs from September with cuts in subsidies for those households that, despite being registered in the registry, exceed a certain consumption threshold.

According to official sources, from Tuesday it will be known which families will be affected. According to the estimate of the Palacio de Hacienda, 80% of those who register in the registry consume less than the required threshold, so they will keep the subsidy. And the lower-income sectors that receive social plans are exempt from complying with this plan.

So far the only certainty regarding the cut-off floor is that in the case of electricity it will be 400 kW per month. The floor for gas and water has not yet been defined, as it will depend on the different regions of the country because the climate impact is different in each.

The major cuts in subsidies to electricity, water and gas tariffs will allow the government to save an amount equivalent to $ 500,000 million annually, a figure that is equivalent to less than one point of GDP, according to reports from the Ministry of Economy.

Despite confirming that the new tariffs will take effect from next month, the full impact of the cut will be felt in the 2023 budget that Sergio Massa, despite his recent arrival at the Palacio de Hacienda, is determined to send to Congress on September 15, as required by law. Therefore, he tries to correct the existing distortions between the electricity tariff by province, for example (see infographic).

That savings of $ 500,000 million will be a consequence not only of the subsidy cuts, but also of the savings they expect to produce on consumption once tariffs are updated.

“The subsidy system had become a Hood Robin: subsidizing more to those who consume the most is contradictory. It is regressive, not progressive. Now we can do what we had to do before ”, the minister slipped in front of his team.

Massa knows that the times to come will be hard on his pockets “We will try to make salaries equal to inflation this year”, they slipped into the minister’s team. As Massa said Wednesday, they point out to the government that both July and August inflation figures will be negative.

At the Palacio de Hacienda they are already opening the umbrella ahead of the July inflation data that will be known next Thursday. “It will be a shock to the government.”

To mitigate this, they are working on a retiree bonus that will be announced next week when the next salary adjustment is announced, which will take effect in September.

The cut in subsidies is in line with the new minister’s intention to respect the agreement with the IMF, which provides for a reduction in spending that will allow the year to end with a deficit of 2.5% of GDP. Sources in the Ministry of Economy admit that today the consolidated deficit has expired by 0.7%. “This is the percentage of what needs to be adapted,” they note. For now, they do not give details on whether other games will be cut. “We are focused on saving”.

Yesterday afternoon the Ministry of Economy did not confirm or deny the resignation of the Secretary of Energy, Darío Martínez, who was circulating in a version on the networks. As it became known, the intention of the new team was to delay the announcement if Martínez leaves or stays at least until Tuesday. That day begins the Argentina Oil & Gas Patagonia 2022 Exposition and the original intention was for Martínez to participate. The other position of strength that remains undefined is that of Deputy Minister. Economic sources assure that Massa will confirm this this Friday.

In deployment, for now, there will be no

The Ministry of Economy is not planning to advance with differentiated exchange rates. “We will not discuss the exchange rate now. We have to focus on reserves, everything is very limited ”, they slip. For now, there will be no progress in split exchange rates for exporters, but in incentives. In this sense, the Central Bank yesterday approved the issue of a Letter in Dollars, aimed at stimulating the entry of external funds for the pre-financing of large exporters.

Currencies deposited through this mechanism will be deposited into the local financial system in a foreign currency account, allowing the financial entity to bid for the equivalent of that deposit, a dollar letter. The interest rate will be fixed in a tender as a spread on the SOFER rate. The Central also allowed access to sight accounts in dollars for exporters who anticipate settlement in more than thirty days with respect to the deadline established for each sector.

Yesterday Massa had a meeting with the Monetary Fund and it was agreed to conclude the revision of the objectives for the second quarter. The Palacio de Hacienda still does not want to specify whether or not an exemption for non-compliance should be requested. “We will not mark the field for the Fund through the papers.” Energy imports have become a waste where dollars go. In Economics they say that the prospects for this month are better than expected: of the 1,980 million dollars of imports expected for August, the last month of severe cold, they would now be 1,250 million dollars.