Why gas rates could rise higher than estimated

The economic challenge posed by the sustainable equation of rates and subsidies from gas natural, in which the National government is immersed in restructuring the scheme inherited from the previous administration, has generated a new dilemma for the energy sector in April: the high import costs of Liquefied Natural Gas (LNG), which arrive in ships at the port of Escobar, in Buenos Aires, They push values ​​upward.

The recent increases in gas service only validated the wholesale prices that arise from the contracts of oil companies with national production and distributors.

Specifically, Resolution 41/2024 of the Ministry of Energy issued at the end of March did not convey to users the estimated cost of imports, which is usually higher than local production.

In this way, if the Ministry of Economy is not responsible for paying the difference with subsidies, the economic contracts of the sector would be at risk. Although “physical” supply is not in danger, The question is who will face that additional expense.

Until now It has not been confirmed that this cost will be transferred to user ratesbut for now it seems complex for the national government to be the one to face the expense.

In April there was a sharp increase in gas due to the almost total elimination of subsidies to N1 (high-income) households, businesses and industries, as well as a partial removal of State aid to N2 (low-income) and N3 households. (middle class).

According to a study by Tariffs and Subsidies Observatory at the Interdisciplinary Institute of Political Economy (IIEP), which depends on the University of Buenos Aires (UBA) and Conicetthe average impact was 344% for N1 users (high income), 475% for N2 users (low income), and 456% for N3 users (middle class).

In the case of Mendozathe impact of the adjustment was:

• A high-income user in the R2 category, who with the December rate table paid $4,563, will now pay $17,154 from April (276% increase).
• The average bill for user No. 2 jumped from $2,275 to $12,373 (+443%).
• The average bill for user No. 3 went from $2,603 ​​to $13,232 (+408%).

In May there will be another higher step, due to the entry into force of winter prices. But if the conflict over imports were resolved in favor of full transfer to users, will mean an additional increase in rates.