All the Answers
Well-known member
Electricity and gas: from July rates will increase every month based on inflation - Infobae
Source:
Luz y gas: desde julio las tarifas aumentarán todos los meses en base a la inflación
El Gobierno prepara un mecanismo para limitar los incrementos mensuales en línea con la expectativa oficial de “desinflación”. Las boletas informarán con mayor claridad cuántos subsidios percibe cada usuario
www.infobae.com
June 05, 2024
The Government is preparing a mechanism to limit monthly increases in line with the official expectation of “disinflation”. The tickets will detail how many subsidies each user receives. They seek to reduce consumption
By Agustín Maza
The Government made official this Wednesday a "targeted" reduction of subsidies for high- and low-income users. (Illustrative Image Infobae)
After the removal of subsidies for electricity and gas made official this Wednesday, from July the rates will increase every month. The Government will implement a system of adjustments based on future inflation expectations , with the aim of limiting the impact of increases in bills if the slowdown in retail prices continues. The mechanism will be defined in the coming weeks by the Ministry of Economy , which is looking for the best “timing” for the increases, according to official sources told Infobae.
In parallel, Eduardo Rodríguez Chrillo 's Energy Secretariat is working on a new invoice model. The idea is that users know what the “real cost” of the public service is and the magnitude of the subsidies they receive from the national State. The premise is to reduce excess consumption and expand the discussion on public spending.
For now, from June residential users will begin to pay more for the electricity and gas they consume according to the resolutions published this Wednesday by Energía in the Official Gazette, which implies increases of up to 155 percent. The rates are made up of four items: taxes, transportation, distribution and the cost of energy . Subsidies are the difference between this last item and what users pay.
Luis Caputo seeks a fine tune between the removal of subsidies and inflation. REUTERS/Matias Baglietto/File Photo
With this increase, commercial, industrial and residential users cover 65% of the real cost of electricity and we could reach 70% on average. Until May, coverage reached an average of 45%, according to Energy sources. The official intention is that next year everyone will pay 100% of what the service is worth, but at least in these six months progress will be made in this “transition scheme” that could be extended for six more months.
“It is important that the N2 and N3 contribute to covering the costs of the system. Things are not worth what people can pay, they are worth what they are worth. Subsidies do have to be granted based on purchasing power,” the Government explains.
The Minister of Economy, Luis Caputo , decided to suspend the monthly increases that were planned for the transportation and distribution components with the aim of moving forward first in removing subsidies with a lower impact. The May increase was suspended and the same was done in June, although a new system will begin in July. It is true that at the beginning of the year the restructuring that these companies received, after the freeze of the previous Government, was in some cases greater than 500 percent.
“It's a matter of timing. In the first quarter there were increases in electricity, gas, water and transportation, among others. The horizon we have does not change, we are arranging things,” acknowledged an official working on the implementation.
Chirillo seeks that all users cover the "full cost" of energy.
The idea of the Palacio de Hacienda is that transportation and distribution rates increase based on the expected inflation for the current month. That is, they do not look at past prices but at future expectations to avoid indexation and have smaller increases, in case the slowdown continues.
However, the sources consulted by this means did not specify which projections will be taken into account although they ruled out the use of the Survey of Expectations (REM) carried out by the Central Bank based on estimates from private consulting firms. Economy recently targeted analysts for providing forecasts above the official guideline.
The Government's premise is to advance its fiscal roadmap, but at a more gradual pace “taking into account the context and the search to consolidate inflation. That is why in Energy they highlighted that there could be more subsidy cuts in case the social situation, reactivation in the second semester through, allows it and could even be increased if the situation demands it.
Caputo's fiscal roadmap provided for a reduction in spending on energy subsidies from 1.5 points of GDP in 2023 to 1% of GDP this year. It would be a cut of about USD 3,000 million. The Ministry of Energy commented that the reduction could be 0.8% of GDP, almost half, in a favorable scenario.
The reduction will be supported by a review of users registered in the Registry of Access to Energy Subsidies (RASE) to verify which users are incorrectly registered. In particular, they will keep an eye on some 1.7 million users who, since 2022, are considered N2 for having the social rate and who have 60 days to re-register in the RASE.
“Debugging Rase as soon as possible is the most convenient. Each of the users can voluntarily present themselves. We are going to strengthen the service channels,” they explained in Energy.
Users are divided into three residential categories according to the segmentation scheme in force since 2022. High-income users (N1) were expected to pay the full cost of energy, low-income users (N2) with a social rate, and middle income (N3) with a subsidized consumption ceiling. The latest official data showed that N1 is 5.3 million, N2 is 8 million and N3 is 2.7 million.
