Buenos Aires — The Ministry of Economy will freeze, for the third consecutive month, the increases planned for the transport and distribution components in electricity and gas rates, while at the same time it will moderate the update of fuel taxes.
Thus, The Government hopes not to add pressure on prices and to continue the slowdown in the Consumer Price Index (CPI).). Minister Luis Caputo has already defended this decision by maintaining that it is necessary to “relieve” the pockets of the middle class and that the fiscal results allow them to take this type of measures.
Light and gas
Electricity and gas rates have increased sharply this year in Argentina, when all the costs of the components of the bills are updated: production (gas), generation (electric energy), transportation and distribution.
As Bloomberg Línea was able to confirm through sources at the Ministry of Economy, the Government decided -as in May and June- stop the update mechanisms planned for electricity and gas transportation and distribution companieswhich must pursue, among other elements, inflation.
This does not imply that the rates that users receive in these months will not come with increases. On the contrary, The Government decided weeks ago to update what is paid for generation and productionaccording to winter prices, and thus reduce the subsidies transferred by the State.
Increase in gasoline
The Government also decided to moderate the increases corresponding to the updating of taxes levied on fuels.
According to current regulations, the tax on liquid fuels (ICL) and carbon dioxide (IDC) must be updated quarterly according to the national CPI. An increase was due in May but was postponed to June and now to July.
A report by the Argentine Institute for Fiscal Analysis (IARAF) indicates that, if the entire update is applied, taxes should increase by 115% in July, which would impact an average increase of at least 15% at the pumps.
According to Bloomberg Linea, the update will be very moderate to avoid a sharp increase in gasoline and diesel prices.
