The Government decided to postpone until the month of May the date on which the update corresponding to the Fuel Tax. Furthermore,The Ministry of Economy decided to extend the new gas and electricity rate scheme that should have been applied starting this Wednesday.
As it turned out, Economy had to define whether it would move forward with a reduction in subsidies for the low-income (N2) and middle-income (N3) sectors in gas and electricity; if it increased the cost paid by businesses, industries and high-income households and if it authorized the monthly adjustment of rates for companies.
The regulatory entities have already calculated how much the increase would correspond to the companies: 10.69% for electricity distributors, 12.5% for gas distributors and 12% for gas transporters, according to NA.
In the end, none of that will happen and everything continues as it was or worse.
The energy companies, for their part, were surprised, without having had a preview of what was going to happen. Among them are Edenor, Edesur, Metrogas, Camuzzi, Naturgy, TGN and TGS. The postponement of the increase was taken as a “bad sign”, since The “sector normalization” plan was postponed before it was even launched.
Gasoline prices will rise the same, but less
With respect to the increase in fuels, based on the standard that will be published in the Official Gazette, the Government decided to defer the update corresponding to the fourth quarter of 2023 of the Taxes on Fuels and Carbon Dioxide for unleaded gasoline. virgin gasoline and diesel, as of June 1, 2024.
The measure implies that there will be no increase for this concept in May. Even so, gasoline prices would rise due to the devaluation of the peso and the recomposition of oil company margins. Although the increase would be less than the 7% initially speculated and would be closer to 4-5%. Specifically, the liter in the City of Buenos Aires will be above $875.
The Government’s objective is to stop the increases to help lower inflation. April is expected to have closed with an increase of 8-9%.
Sales in the fuel market fell 5% in the last year, due to the impact of price liberalization and market deregulation.
In the last four months since the arrival of Javier Milei to the Presidency, the price of fuel has accumulated an increase of 106%. Today super gasoline is around $850, while premium gasoline ranges from $1,029 and diesel costs $879.
The most recent increase was in the month of April in the midst of the inflationary escalation and the pressure due to the exchange rate delay, where it increased again by an average of 4.6%, and a new increase was expected for the beginning of May that would be around 8%.
