The Government of Javier Milei made official this Wednesday the details of the removal of subsidies from energy rates that will take effect starting in June as part of the transition to a new assistance scheme. In addition to paying more for electricity, we will also have to face increases in the gas used by San Juan households.
In the case of gas, the increases are more moderate, up to 30% compared to previous ballots, according to Infobae. This will affect 84,403 consumers in San Juan. 57,541 users belong to the low-income group and 26,862 people belong to the medium income group.
Through Resolution 91/2024, the price of natural gas was established at the Point of Entry to the Transportation System (PIST) to be transferred to the final rates. The PIST is the price of gas consumed by users, and Its new cost for the May-October period is US$3.29 average per million BTU (British unit of measurement for gas).
The increases
- N1 users (high income) will pay an average of US$3.29 per million BTU. However, it is estimated that the price of gas in winter is around US$5 per million BTU, so they will continue to be subsidized.
Until May, businesses, industries and high-income users paid US$2.94. In the original path of increases, before the Ministry of Economy postponed the corresponding update last month, these users were going to pay US$4.49. Therefore, the Ministry of Energy decided to reduce the original increase, which would have meant a strong adjustment in bills in winter.
- N2 or Low Income users will have a 64% bonus on the price paid by those with high incomes, that is, they will cover US$ 1.18 per million BTU. Until April they paid US$ 0.8 per million BTU, so they will pay almost 55% more for gas. Low-income households, which previously had an unlimited subsidy, will now have a maximum limit, which will be the same consumption block that middle-income users have. When these households exceed the maximum subsidized consumption, they will pay the established reference price (US$3.29).
- N3 or Middle Income residential homes will have a 55% bonus on the PIST, so they will only pay almost US$1.81 per million BTU. Until April they paid US$ 1.1 per million BTU, which implies an increase of 64% in that concept.
How much will be paid in pesos? The average value of final gas bills for an N1 user with an average consumption of 149 m3 per month will go from $25,756 to $28,142 (9%); for an N2, with an average consumption of 159 m3, it will go from $15,638 to $20,797 (33%), and for an N3, with an average consumption of 171 m3, it will go from $24,465 to $26,865 (10%)
Subsidies continue
Despite these increases, all residential users, households and industries will continue to receive subsidies, since the real cost of producing and importing gas throughout the year is approximately US$5.2 per million BTU. That is, industries, businesses and N1 will pay 63% of what gas costs; the N2, 22%, and the N3, 35%. The rest of the cost is covered by the National Treasury.
