In the last hours, the National government of Javier Milei decided that it will once again stop the increases in rates of light and gas scheduled for July. In this case, the increase corresponded to improve the margins of the companies that provide regulated public services for the transportation and distribution of electricity and natural gas, and would have had an impact on the bills of homes, businesses and industries close to 2% or 3%.
On the other hand, in a desperate attempt to National government to control the inflation Next month, the Minister of Economy, Luis Caputodefined that it will apply a tax increase to the fuels which is equivalent to a 1% impact on gasoline and diesel, which will be effective as of Monday, July 1.
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Both measures seek to consolidate a process of lowering the inflationwhich would have been interrupted in June after five months, precisely due to the tariff adjustments applied by the National government whose main objective was to reduce public spending on various subsidies.
On the side of the light and the gasthe companies affected by the measure are Transener, Transba, Transpa, Edenor, Edesur, Southern Gas Transporter (TGS), Northern Gas Carrier (TGN), Metrogas, Naturgy, Camuzzi, Ecogasamong others. “We are going to have to drastically reduce our investment plan,” anticipated the executive of one of the aforementioned firms.
It should be remembered that, between February and April, National government had signed agreements with the companies to withdraw judicial and administrative claims in exchange for increasing rates and maintaining a monthly indexation formula based on the past evolution of the inflationsalaries and the cost of construction.
Meanwhile, for June Caputo had ordered the Secretary of Energy, Eduardo Rodriguez Chirillocancel that mechanism and start from July with a formula that incorporates the inflation projected future to update company income.
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However, the first time that this formula had to be applied, which according to the agreements corresponded to the month of May, the National government He postponed it until June. Now, the action of the administration of Freedom Advances will be the same: regulate the increases so that the final number of the inflation.
However, by the end of next month, electric companies will have a delay in their rates of close to 50%, equal to the inflation accumulated since February, while for distributors of gas The delay will be 25%. With this lost income, part of the investment plan could be delayed.
For example, the promise of National government for the private sector is that before the end of the year it will convene the Five-Year Tariff Reviewwhich will define a five-year investment plan in exchange for guarantees and certainty regarding rates. This year’s arrears will be compensated in the future with higher increases that users will pay for 60 months.
On the other hand, the fuels Yes, they will have an increase next week, which will incorporate the monthly devaluation of the peso against the dollar and the increase in taxes, so the naphtha will go up to at least $930 or $935 per liter in the Autonomous City of Buenos Aires. The cost varies depending on the town and province.
The remaining update of taxes on fuels exceeds $100 per liter of naphtha and the $80 in the gasoiland will be applied throughout the second semester, starting in August, possibly in installments.
With these taxes, the Government of Javier Milei seeks to recover tax revenue for a total of 0.5% over the Gross domestic product (GDP) throughout the year, or the equivalent of 3,000 million dollars, 10% of the fiscal adjustment proposed by the management of Freedom Advances when assuming.
