How much will electricity and gas cost with the removal of subsidies?

The Government will implement a new increase in electricity and gas rates with the application of the new wholesale values. At the same time, reduced the caps maximum consumption subsidized for low and middle income users (N2 and N3). The decision could implyaccording to private calculations, new increases of more than 100% on the winter ballots of those households.

Through four resolutions, to the Ministry of Energy inaugurated the so-called transition period, which will run from June to November 30, as established at the end of May by decree 465. The objective is leave aside the regime of subsidies generalized and replace it with one “focused on those who require it.”

The new scheme establishes that “the cost kilowatt per hour of electrical energy and cubic meter of natural gas is identical for everyone, and the assistance that the State provides to users according to your ability to pay and reaches up to a consumption limit through the recognition of a lower payment (bonus),” Energía said in a statement.

All consumption above those limitswhatever the user category, will be paid at “actual” cost. In that sense, Energía established new price for gas at the point of entry to the system (PIST) to US$3.30per million BTU, a 20% more than the current value, but below what was previously scheduled for May.

He also established a 28% increase in it price wholesaler of the electric power (PEST) until July 31, which becomes $59,298 per Mwh (in the summer it was $46,018).

He final impact The decision will be according to consumption and the area and will begin to be reflected in the bills that arrive by the end of July, due to billing deadlines. HE will be added to the increases already collected, of 500% average. According to private calculations, the new increases can reach 150% for some middle-class users.

Still the government continues without applying increases for transportation and distribution both gas and electricity, which were to start in May and which were frozen by decision of the Minister of Economy, Luis Caputo.

Changes in the gas rate and new subsidy limits

With the premise of “a single price for everyone” and with “bonuses” according to the ability to pay of households, the Government established a new wholesale price for gas (PIST, or the price that enters the transport gas pipeline system and is then distributed to homes, businesses and industries).

Thus, Energía changed the consumption cap with subsidy for low-income users (N2) by equating it to those with average income (N3). This subsidized block is variable depending on the area and time of year. For example, in AMBA, the annual block reaches about 390 m3).

Energy stated that middle-income users (N3) will have a 55% bonus of the price of wholesale gas, while N2 will have a 64% subsidy of that PIST value.

To “guarantee a sustainable and equitable gas supply for all users, avoid shortages and ensure the economic viability of the sector.” energy, the Government set the “new gas production values that will be transferred to users” in the following way in June:

Residential users N1 (high income) and productive sectors (business and industry) will pay US$3.30/MMBTU, according to distributor.
Residential users N3: the base consumption is US$1.50/MMBTU, according to distributor. consumption surplus is paid to US$3.30 USD/MMBTU.
N2: The base consumption is US$1.20/MMBTU, according to distributor. consumption surplus is paid to US$3.30/MMBTU.

“In order to achieve the normalization of the electrical sectora only price for all users that will allow residential ones contribute with greater coverage of the supply cost“, emphasized the Secretariat in charge of Eduardo Rodríguez Chirillo.

Energy exemplified, by way of illustration, during June 2024, at the three levels of segmentation, the average value of the final monthly invoices will be the following:

N1with an average consumption of 149 m3, will go from $25,756 to $28,142
N3with an average consumption of 171 m3, will go from $24,465 to $26,865
N2with an average consumption of 159 m3, will go from $15,638 to $20,797.

Change the electricity rate and the new subsidy limits

For electricity, to middle-income users (N3) electricity, they are reduced 400 kw per month to 250 kw monthly he subsidized energy block. Up to that limit, 45% of the wholesale price will be paid. of electrical energy.

As for the low income households (N2) establishes a subsidized consumption limit of 350 kw monthly. Until now, this segment that has income of up to a basic basket had no limit on subsidized energy, that is, they paid a cheaper rate regardless of their consumption.

With these limits, users N3 will have a bonus of 55.94% about the wholesale price. The users N2 will have a subsidy of 71.92% about that value.

The Secretary of Energy reported in this regard that the PEST price from June will be moved to users as follows:

Users N1 (high income) and productive sectors (commerce and industry): they will pay between $56,019 and $59,298 MWh according to time zone.
Users N3 (average income): base consumption becomes $30,000/kWh, while excess consumption will be paid between $56,019 and $59,298 MWh.
Users N2 (low income): base consumption becomes 20,000 $/MWh, while excess consumption will be paid at the values indicated for the segment without subsidy.

Due to the bonuses (subsidies) of wholesale prices, Energy exemplified with average residential consumption of 260 kwh the average value of the final monthly invoices, according to segmentation level: