Hear
The Government decided Postpone the planned increases in electricity and gas rates for Julyconfirmed official sources from the Ministry of Economy. This means that Their prices will be frozen for at least a month.. In this way, Minister Luis Caputo postponed the monthly adjustment that was going to be tied to a formula for estimating future inflation, not yet designed.
This determination occurs in the midst of a context in which private inflation estimates signaled bad news for the pocketbook with a rebound in June, which would interrupt the slowdown trend registered so far this year. More specifically, after the 4.2% inflation rate in May, in June the price increase already showed a rebound, according to the private sector, around 5.5%.
In addition, the Treasury reported that Caputo considered the seasonal component. In the winter, gas consumption is usually higher and, consequently, what users pay is also higher. Therefore, this freeze put a stop to last month’s increases, which had been between 9% and 33% in gas and between 23% and 156% in electricity.
In turn, in the portfolio led by Caputo they explained that there will be no reduction in subsidies either. Therefore, it remains pending what will happen with the recomposition of the profitability of gas and electricity transport and distribution companies. Among them are Edenor, Edesur, Metrogas, Naturgy, Camuzzi, TGN and TGS.
The final value of the energy bills is made up of the cost of three services, plus the surcharge for national, provincial and municipal taxes and fees. It is equivalent to the cost of generate electricity or produce gas (which has subsidies from the Treasury), the transport energy to the consumption centers and the one of distribute it in homesbusinesses and industries. The last two services are not segmented by income level and therefore the cost is the same for all households.
Last month, the Ministry of Economy applied an increase in one of the three components to reduce the weight of subsidies. In fact, In electricity, residential, commercial and industrial users together now cover 65% of the total cost of the electrical systemwhile last month it was 45%, according to official estimates. There are variations in between: high-income households pay 78% of the cost, while low-income households pay 22%.
To make room for the reduction of subsidies and so that the final increase does not abruptly impact the final values of the invoices and, therefore, inflation, The Ministry of Economy froze the increase of the other two components (transport and distribution) during May and June.
So far this year, electricity rates rose 234% and gas prices 1179%, on average, between increases in prices and quantities consumed, according to calculations by the Interdisciplinary Institute of Political Economy (IIEP), which depends on the UBA and Conicet.
“The cost of the total basket of public services in the metropolitan area of Buenos Aires (AMBA) increased 365% compared to December last year, based on the updates to transportation rates (January and February), electricity (February and June), water and natural gas (April and June). Natural gas and electricity consumption are adjusted for the seasonality of consumption,” he says.
Last month, the average value of final gas bills for an N1 user with an average consumption of 149 m3 per month increased by $25,756 to $28,142 (9%); for a N2, with an average consumption of 159 m3, it went from $15,638 to $20,797 (33%)and for an N3, with an average consumption of 171 m3, it rose from $24,465 to $26,865 (10%).
Regarding electricity, if average residential consumption of 260 kwh per month is considered, the average value of the final bills For an N1 it rose from $24,710 to $30,355 (23%); for N2, from $6295 to $12,545 (100%), and for N3, from $6585 to $16,850 (156%).
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