The inflation May brought two good news for the Government: the fifth consecutive slowdown and the first time in 10 months that the year-on-year measurement is lower than the previous one, according to the consensus of market consultants. However, this movement does not prevent June from starting with increases in items that remain regulated by the State.
This is the case of public service, fuel and transportation rates. that will put pressure on the Indec indicator and that will hit the weakened pockets of consumers.
The most paradigmatic case is that of electricity and gas rates because the Ministry of Energy was instructed to begin in June with the removal of subsidies for low- and medium-income residential users, although until Friday it had not been specified in what proportion. . It is known that this is a universe of almost 7 out of every 10 households that, for example, until May paid less than 5% of the “real cost” of electricity in their bills. The rest is covered with transfers from the Treasury to the generators through Cammesa.
The strong increases registered in the first four months, of up to 450% on average, were on the concepts of distribution and transportation, to rebuild the income of these companies.
The strong increases registered in the first quarter in gas and electricity, of up to 450% on average, were on the concepts of distribution and transportation
The Minister of Economy, Luis Caputo, decided to freeze again the planned increases in the rates of those segments, but to advance in the removal of subsidies. The intention is that the impact on the Indec Consumer Price Index (CPI) is as low as possible.
In April, Indec registered a strong increase in the area of public services: they jumped 35.6%, accumulated 110.5% so far in 2024 and 311.6% in the last 12 months. Inflation had reached 8.8%, 65% and 289.4%, respectively.
Since this Saturday, June 1st, gasoline and diesel have increased by an average of 3.5% throughout the country. The increase is due to the increase that Caputo defined in the liquid fuel tax (ICL) and the transfer of the devaluation applied by the oil companies YPF, Shell, Axion and Puma.
And in July the transfer to suppliers of the tax component could be up to 18%, as defined in the last official update path that was modified in the last week by Economy.
In the Metropolitan Area of Buenos Aires (AMBA) train and bus fares will not increase. However, the Buenos Aires government defined that as of this Saturday the subway increases from $574 to $650, despite the fact that the City Judicial Branch had suspended the update schedule, although there were no changes due to the appeal made by the government of Jorge Macri. But, if the appeal is rejected, starting next week the rate could return to 125 pesos.
On the other hand, the City decided to increase the toll rates for entry and exit to the CABA by 35%, which will start from $903 for motorcycles and will go up to $21,320 during peak hours for vehicles with 5 axles or more. The new fare schedule applies as of this Saturday for those traveling on the 25 de Mayo, Perito Moreno, Illia, Retiro II, Sarmiento, Salguero, Alberti and Paseo del Bajo Highways.
The extensive negotiations that the Government and the main prepaid medicine companies held in recent weeks ended with an agreement in court for the companies to return to their affiliates balances collected above what the Executive Branch considers to have been due since December, change to “release” the prices of monthly installments starting in July.
The companies that signed the agreement must, from July, refund to their clients the amounts that they have overcharged on their invoice, understood as the percentages above the inflation rate of the previous month, which is the criterion set by the Ministry of Economy to limit increases. Minister Luis Caputo even spoke of a “war against the middle class.”
