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Electricity and gas rates: by the end of the year, users will cover almost the entire cost of the service without subsidies - Infobae
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Tarifas de luz y gas: para fin de año, los usuarios cubrirán sin subsidios casi la totalidad del costo del servicio
Tampoco serían necesarias nuevas subas reales ya que ese objetivo se cumple por el menor costo de la energía en el verano. El próximo invierno, el gas y la electricidad serán más baratas que este año
www.infobae.com
August 29, 2024
No further real price increases would be necessary either, as this objective is met by the lower cost of energy in the summer. Next winter, gas and electricity will be cheaper than this year.
(Illustrative Image Infobae)Following the decision to move forward not only with the adjustment of tariffs but, above all, with the removal of energy subsidies in September, the Government hopes to reach the end of the year with a minimum level of coverage of the cost of the service by the State. In return, it hopes that users will bear almost the entire cost of their consumption. Although it has made progress towards this objective since the beginning of the year, the process is still halfway there: in gas and electricity, before the increase in September, users today cover less than 40% of the real cost through tariff payments . Except for water services, where users already pay 100%, the process of adjusting tariffs has come with ups and downs, although the focus on reducing subsidies remains.
Thus, if conditions remain constant until the end of the year, demand —both household and industrial— will end up paying 81% of the cost of electricity and 82% of natural gas by the end of the year. That is what Gustavo Lopetegui, the former Secretary of Energy during Mauricio Macri 's administration, estimated in a report . The former official analyzed the impact of the adjustments made during the first six months of the year and warned that, if there were no factor that alters the forecasts, that objective would be reached without the need for new increases, in real terms.
“For this projection to be sustained, it will be crucial for the Government to continue adjusting the dollar by only 2% per month and avoid a devaluation,” the report said. A jump in the exchange rate impacts production and generation costs, which would force new increases not foreseen for now.
In the case of electricity, residential demand paid, on average, only 22% of the total cost in January 2024. With the tariff increases applied in February, that percentage rose to 61%, fell to 40% in May and after the last adjustment, the percentage paid by demand climbed to 70% after the last adjustment. Thus, in November, according to the former minister, the highest coverage in recent years will be achieved by the end of the year.
However, that could change again next winter, as Argentina continues to import gas to cover all demand during the cold season.
Imported energy is more expensive, so the monomic cost - as measured in the sector - increases since local energy is not enough to supply the total demand. In the months with higher temperatures, the opposite effect occurs, since the average cost of generating the energy consumed is reduced due to the lower dependence on imports.
Hence, even though costs will rise in the winter, it is expected that there will be a strong reduction compared to this year and even more so compared to last year since the progress of the gas pipelines allows reducing the volume of imported gas and replacing it with the Vaca Muerta fluid, at a much more competitive price. This is what Lopetegui highlighted in his report, where he highlights that the full operation of the new gas pipelines, both those already built and those under construction, will help reduce gas imports. For this reason, the average cost of gas and electricity generation next year will be lower . As an example, he pointed out that in 2023 the cost of electricity generation per month was USD 73 per MWh while this year it was reduced to USD 67 and the estimate is that next year it could drop to USD 64 per MWh if the injection capacity of the Néstor Kirchner Gas Pipeline increases and the reversal of the Northern Gas Pipeline to replace gas from Bolivia comes into operation.
