The gas subsidy of up to 50% is maintained for cold areas

The gas subsidy of up to 50% is maintained for cold areas
The gas subsidy of up to 50% is maintained for cold areas

The provinces that will have the gas subsidy

After strong pressure from legislators, Mendoza, San Juan, San Luis, Salta, Córdoba, La Rioja, Salta, Tucumán, Catamarca and about 50 locations in Buenos Aires Within the scheme, they support the subsidy.

The ruling party’s bill that had achieved half a sanction in the Chamber of Deputies authorized the Executive Branch to modify, transform, dissolve or liquidate trust funds. The rule contemplated the exclusion of Trust Fund for Residential Gas Consumption Subsidies created by Law 25,567 although it did not mention the last modification.

What does the opinion say?

The opinion that came from the Senate included the modification of Law 27,637 promoted in 2021 by deputy Máximo Kirchner that extended the benefit to more areas of the country than originally planned. This detail had generated concern among interior legislators, who sought to ensure the maintenance of these subsidies.

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Through the ruling of the Base Law that came out of the Senate, about half of residential natural gas users in Argentina receive a subsidy of between 30% and 50% on their final bills. Photo: LMN.

The regime provided for by Law 25,565 on Cold Zones originally provided that since 2002 some 800,000 users in Patagonia, Puna and Malargüe (Mendoza) will have a discount on their rates of 50% on what they pay in the price of gas. Two years ago the benefit was expanded to other areas of the country with cold or temperate-cold climates and reached 4.3 million homes, out of a total of 9 million in the country. Localities from Mendoza, San Juan, San Luis, Salta, Córdoba, La Rioja, Salta, Tucumán and Catamarca joined, as well as fifty municipalities in the province of Buenos Aires.

How is the gas subsidy financed?

This point caused concern to the governors, in advance of the new rate increases that the Government will apply from June. Although the subsidies for cold zones do not arise from a contribution from the Treasury, but rather They are financed with a surcharge on bills throughout the countrythe intention of Javier Milei’s management was to eliminate the benefit.

This surcharge is 5.44% on the price of gas (PIST), which are paid by all users (residential, commercial and industrial) in the country. Contributions go to the Trust Fund for Residential Gas Consumption Subsidies.

The Government transfers to the distributors the difference between what the beneficiary households pay and the “real cost” of the invoice to the distributors with funds from that trust. Last year, this fund had income of $116,877 million and expenses of $77,663 million, that is, a positive result of $39,213 million. This was one of the trust funds that the Government had in its sights for its elimination.

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