Increases close to 400% arrive in gas bills
After the energy emergency due to the lack of gas this week, the national Treasury must decide whether to announce for June a reduction in subsidies for low- and medium-income residential users, which until now have not had any modifications. The Ministry of Economy postponed this decision in the first six months of management and that meant that 70% of households paid less than 5% of what electricity costs and less than 20% of what gas costs.
The situation is politically more complicated, because in recent days gas bills began to arrive with average increases of 380% that were authorized in April. The increase is explained because there was an update of rates for distribution and transportation companies, two services that make up the total cost of the tickets and that had also been delayed by the rate freeze applied by the previous government.
The final value of the gas and electricity bills is made up of the cost of three services plus the surcharge for national, provincial and municipal taxes and fees. There is the cost of generating electricity or producing gas, the cost of transporting the energy to consumption centers and the cost of distributing it to homes, businesses and industries.
Last April, the National Government prioritized rebuilding the lost profitability of gas companies, including Metrogas, Naturgy, Camuzzi, TGN and TGS. The increase also occurred just before the start of winter, when residential gas consumption doubles. This generated a double effect on the final value of the bills, due to higher prices (new fixed and variable costs) and due to the increase in the consumption of cubic meters (m3) of gas.
From one month to the next, bills rose in some cases by 900%, as happened to a Metrogas user who doubled his gas consumption from 30 to 60 m3, and the fixed cost went from $399 to $6,456 (1,500%). In total, the ticket rose from $1029 to $10,716.
In the case of a Naturgy user, who increased his consumption from 70 m3 to 80 m3, the fixed cost went from $894 to $5,456 (510%), and the final bill rose from $3,581 to $13,404.
A similar situation happened in February with increases in electricity bills. Even so, gas and electricity services remain economical in relation to other similar services, such as internet or mobile phone payments. However, the Government must decide whether to apply a reduction in subsidies next month, in a context in which purchasing power has not yet recovered (it matches inflation).
Specifically, low-income users (N2) pay with their bills only 4% of the cost of electricity generation and 14% of the cost of gas supply. Middle-income households (N3) pay 5% of the cost of electricity and 20% of gas, according to calculations by the Interdisciplinary Institute of Political Economy (IIEP), which depends on the UBA and Conicet.
The National Energy Secretariat will seek to remove subsidies so that user bills cover most of the cost, but in addition, there could be modifications in the way of subsidizing, as announced this week in a decree.
The short-term objective is to establish a subsidized consumption limit for low-income users, who until now have unlimited subsidies, and the subsidized consumption block that middle-income households have will be lowered. On the surplus of these consumption blocks, households will pay the real cost of the service.
At the same time, the Ministry of Economy will once again postpone the rate increase that corresponded to distribution and transportation companies, as it did in May, just a month after launching an automatic update formula. This brought criticism from the companies, which had already committed investments linked to future rate updates.
For high-income residential users (N1), businesses and industries, the Government could also opt for a reduction in subsidies. Currently, N1 households pay 65% of the cost of electricity and 51% of the gas supply. Although the Government had said that they had no more subsidies, energy costs usually increase in winter, beyond the inflationary component and the devaluation of the exchange rate.
