Removal of subsidies could lead to over 500% increases for homes, industries, and businesses
Economy

Tripled Gas Rates for Consumers as Government Drops Subsidies in Argentina

The Government is set to sign resolutions on Tuesday that will result in an increase in natural gas rates starting from April 1. The subsidies for high-income households, businesses, and industries will be removed, causing the price of gas to at least triple next month with another increase expected between May and September. This rise in bills will be most noticeable in the winter months when consumption is higher.

The official announcement comes two months later than originally planned. The Ministry of Energy and the National Gas Regulatory Entity (Enargas) had initially intended to implement the increases in February, but the Minister of Economy, Luis Caputo, delayed the decision in an effort to control inflation. Given the fiscal situation and the state of the energy sector, the decision could no longer be postponed.

The new resolution establishes wholesale gas prices at the Point of Entry to the Transportation System (PIST), which includes a combination of local production and imports. Gas is only a portion of the overall bills, which also include transportation, distribution, and tax margins. The impact of this resolution on users is still unclear as official sources have not provided any responses yet.

Residential users in different income categories will see varying increases in gas prices. For example, N1 households and some non-domestic users will experience a nearly tripled gas price in April while low-income N2 users will see a more moderate increase. The prices are expected to rise even further between May and September due to companies’ request for significant tariff increases to cover up their arrears accumulated since 2019 as well as currency devaluation against dollar which added up to current situation despite this challenges Government is working with sector executives to finalize updates ensuring sustainable energy system for future

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