The Government announced this Wednesday what the removal of subsidies from electricity and gas rates that will begin to starting in June and will last until November 30, until the new targeted subsidy scheme is implemented.
Through four resolutions published in the Official Gazette – 90, 91, 92 and 93/2024 – the Ministry of Energy lowered the subsidized consumption limits electricity and gas that they will have residential users low (N2) and middle (N3) incomeso expected sharp increases in ballots.
“It is done like this the beginning of the process to move from a generalized subsidy regime to a targeted onein which the user can know the cost of kwh of electrical energy and m3 of natural gas, which is identical for everyone, and the assistance that the National State provides to users according to their payment capacity and which reaches up to a limit of limited consumption through the recognition of a lower payment (bonus),” Energía explained.
Electricity bills: how they will look with the increase and removal of subsidies
Through the Resolution 92/2024, Energy increased the Seasonal Price of Energy (PEST) at $57,214 per megawatt hour (MWh) for all residential users. This value will apply from May to October.
The users of high income (N1) They will pay 100% of the cost of electricity. While those of low incomes (N2) and those of average income (N3) will have a discount of 71.9% and 55.9% on that price on the invoice, respectively.
According to the estimate of the Ministry of Energy, lThe increases for an average residential consumption of 260 KWh will be:
- High income (L1): will increase a 23%from $24,710 to $30,355
- Low income (L2): will have a rise of 100%from $6,295 to $12,545
- Average income (N3): they will have increases of 156%from $6,585 to $16,850.
Likewise, in the Resolution 90/2024 establishes a lowering of consumption caps with subsidy for middle and low-income users.
In this way, users of Level 2 (low income) will have a base consumption limit (subsidized) of 350 kWh/month.
While Level 3 users (average income), The base consumption limit is set at 250 kWh/month, until now it was 400 kWh/month.
How the increases and removal of subsidies will impact the gas rate
In the Resolution 91/2024 It was also established that the price of the PIST — the cost of the gas consumed by users — will be US$ 4 per million BTU between May and October.
N1 users (high income) will pay that price, because they have no subsidies. While the N2 users (low income) They will have a 64% bonus on the US$ 4 per million BTU. As until April they paid US$ 0.8 per million BTU, now They will pay almost double.
While the middle income users (N3) They will have a 55% bonus on the PIST. Thus, they will pay almost US$2 per million BTU (until April they paid US$1.1 per million BTU), so They will have an increase of 81%.
Besides, Subsidized consumption limits are unified for low- and medium-income users. Both categories will now be capped at N3, when they exceed that limit they will pay the rest without subsidy.
According to Energy, the The average value of the final gas bills would look like this:
- User N1 (high income): for a average consumption of 149 m3 per month the ballot will go from $25,756 to $28,142. That is, it will have a 9% increase
- User N2 (low income): for a average consumption of 159 m3 per monthwill go from $15,638 to $20,797, which implies a 33% increase in the bill.
- User a N3 (average income): with a average consumption of 171 m3the ballot will go from $24,465 to $26,865. will increase a 10%.
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