Hear
Before winter begins, AMBA electricity and natural gas users began to receive invoices with the rate adjustments arranged in April and announced based on average consumption – as has been customary in all governments – but which were unexpectedly suspended in May to avoid their impact on inflation. Although the Ministry of Economy achieved the objective of lowering the May CPI to 4.2%, now these pending invoices cause unpleasant surprises for those who must pay them. In many cases, they register percentage increases of three or four digits compared to the previous two months and above the inflation accumulated in the last twelve months (276%).
To cite a specific case, a residential gas user (R2) in CABA who in March had paid – in round numbers – the ridiculous sum of $1,600 for 175 cubic meters consumed this month must pay $23,000 for the same consumption as in April. In this increase, more than 1,300%, the sharp increase in the fixed charge (to $10,000 per month), equivalent to 43% of the bill, weighs more than the higher price of gas consumption ($7,900). But The fixed component will not be modified if you had gone on a trip in May and closed the stopcock.
In fact, unlike electricity, in natural gas the new fixed charges have replaced the distribution value added (VAD) of the companies since April, in exchange for investment commitments of US$200 million in maintenance and improvement of the network. It was a way to provide “cash” to distributors after almost five years of tariff freezes.
In turn, the variable charge for consumption became the wholesale price of gas at the point of entry into the transportation system (PIST), which, as set seasonally, rises in the months of greatest demand (May to September) and decreases in the rest. For most residential users this component is gibberish; It is expressed in dollars per million BTU (unit of measurement) and makes it difficult to estimate its impact on invoices in pesos.
What has remained unchanged (or increasing) for years is the component of provincial and municipal taxes (Gross Income, rates, specific funds, etc.), on which 21% VAT is applied and, in the case taken as a reference, completes a tax burden of $4000.
Although with much higher nominal amounts, the three- and four-digit increases in electricity and gas bills with respect to rates virtually frozen since mid-2019 were also the characteristic of the adjustment applied since last March to industries, businesses, consortia and users. high-income (N1) residential homes, for which state subsidies were eliminated.
However, this is all part of the recent past. Less than two weeks ago, the Government ordered new changes to the energy tariff scheme with the aim of cutting subsidies and sustaining the fiscal surplus, which will be felt in the bills for the winter months. Through a decree (465/24), it reduced the subsidized monthly consumption limits for low (N2) and medium (N3) income users in exchange for bonuses of 64% and 55% with respect to the wholesale price of the corresponding energy. at the high income level (N1), businesses and industries.
Specifically, in the case of natural gas, the PIST was set at US$3.30 per million BTU (with an increase of 14.2% compared to April) for level N1 consumption. But the 64% bonus for N2 will be applied on a base consumption of US$1.2 MBTU (until now it was unlimited), which in the lowest category (R1) is equivalent to 41 m3, and the excess will be charged at US$3 ,30. The same will happen with N3 if it exceeds the base consumption of US$1.5 MBTU. A resolution from Enargas has already established the tariff tables for distributors throughout the country. By way of illustration, the Ministry of Energy reported that in June the average value of final invoices for level N1 with an average consumption of 149 m3, will go from $25,756 to $28,142 (9.2%); N3 with 171 m3 from $24,465 to $26,865 (9.8%), and N2, with 159 m3 average, from $15,638 to $20,797 (33%).
In the case of electricity, the subsidized consumption floor fell from 400 to 350 kwh per month for N2 users (low income) and to 250 kwh for N3 users (middle income), except for those households without access to gas through networks. where those quotas will be doubled until the end of August.
N1 users (high income, businesses and industries) will pay from June the seasonal price of electricity (PEST) postponed in May, which was set between $56,019 and $59,298/MWh, with an increase of 29% compared to April. The N3 will have a bonus of almost 56% and the N2, almost 72%, but in both cases the excess consumption will be valued at the price defined for the N1. According to official information, considering an average residential consumption of 260 kwh per month, the value of the final bills for the N1 segment will increase from $24,710 to $30,355 (22.8%); for N3 from $6,585 to $16,850 (151.8%), and for N2, from $6,295 to $12,545 (99.3%).
However, given the complexity of the tariff scheme and the diversity of residential gas and electricity consumption, It would be advisable for distributors to communicate other billing ranges to their users in order to prevent new unpleasant surprises.
At the same time, Energy reported that users who have already requested their inclusion in the Registry of Access to Energy Subsidies (RASE) will not have to register again; although a resolution (90/24) indicates that those included in the social rate between August and September 2022 must do so individually within a period of 60 days. It also invites provincial regulatory entities to adhere and adapt the information circuits to the new subsidy scheme, since these come from the national Treasury.
In a work titled “What is missing is management”published by Nuevos Papeles on the X network, the specialist Alejandro Einstoss details the sequence of marches and countermarches of the Government in tariff matters.
After admitting that the starting point of the current administration was very challenging, with energy prices and tariffs that covered less than 10% of costs, virtual default in the sector, a large subsidy bill and a reduced technical team, he underlines that The initial exchange rate adjustment (118%) liquefied the already overdue rates in pesos that must pay dollarized costs.
He adds that the Government started with the call for public hearings in January to update the wholesale prices of gas and electricity, through a scheme that would reduce subsidies in three equal and successive monthly rate jumps of 33% each, and in three months The problem of subsidies would be solved. “However, on February 1, the new electricity rates were published (first jump), in March there were no news; Only on April 1 were the new gas prices published and no one from the government team spoke any more about the three months or the three jumps or the hearings,” he explains. Then, in May, the Ministry of Economy suspended the increases to “consolidate the disinflation process” and moved them to June. Einstoss summarizes that in 20 days all tariff agreements and commitments reached in six months were reversed.
It also points out that “there is still no federal social rate mechanism, which is decisive for the success of any process of recomposition of relative prices in a situation of high inflation, high poverty and falling real wages.” And he questions the postponed official initiative to create a Basic Energy Basket (CBE) with multidimensional criteria (income, inhabitants per home, consumption, geographical location, bioclimatic zone), “because it implies the implementation of multiple baskets, perhaps as many as families reside in the area.” country, through a mechanism of extreme complexity not only for the management of information, but also for its implementation, which does not recognize regional or global antecedents.”
For its part, Fernando Navajas, chief economist at FIEL, maintains that the decision to introduce a consumption step of 350 kwh per month, after which subsidies or bonuses for the most vulnerable users (N2) are eliminated, could have an impact on around half a million of AMBA households with bills of $60,000. It also notes that the RASE does not require that the services be in the name of the owner, which creates classification problems and that, except in some states in the United States, there are no fixed charges equivalent to 10 dollars per month on invoices in the world. Of gas.
Although the RASE was implemented in 2022 by the then Minister of Economy Martín Guzmán with the aim of avoiding the “pro-rrico” bias of the Kirchnerist policy of frozen and indiscriminately subsidized rates, his successor Sergio Massa as a presidential candidate extreme these distortions by triggering inflation to 211% year-on-year in 2023, poverty above 40% and state subsidies equivalent to 1.5% of GDP. On this basis, any recovery of rates in real terms after almost five years of freezing implied adjustments of three digits higher than that inflationary floor.
Even so, the pending account is that no segment of the population pays the full cost of the energy it consumes. According to Einstoss calculations, the N1 pays 78%; N2, 22%, and N3, 35%. It is also not easy to promote rational use of energy, when in the last 21 years there were 16 with rates that did not cover the cost of the service.
