February arrives to Argentina – and so does the latest batch of price hikes

Temperatures are soaring in Argentina and so are prices – with the start of the new month, new hikes are also on the way.

Large increases are expected for key areas, such as transport fares, health insurance payments, rent, gas and electricity rates, fuels and freight.

Here’s a look at some of the increases due this month.

 

Rent

Regardless of the fact that President Javier Milei’s emergency decree repealed the Rent Law, ongoing contracts must be observed until their expiration date. This means that, while agreements are in force, only terms and conditions that have already been agreed upon will be applied.

Those who started renting under the old law will face rises of close to 147 percent year-on-year. Thus, January breaks another record for the ICL Lease Agreement Rate prepared by the Central Bank on the basis of inflation and wages.

This formula is applied only to leases which started between July 1, 2020, and October 17, 2023. The latest amendment of the Rent Law, in October 2023, established adjustments every semester through the ‘Own House Rate,’ but those who have signed a contract during that brief period between its enactment and repeal in late December by the Emergency Decree, will not see the first impact on their rent until April.

In the meantime, increases for those who have signed contracts after the economy was “deregulated”by Milei’s decree will be applied based on the agreement between the landlord and the tenant.

 

Private health insurance

Since healthcare services were deregulated as authorised by Emergency Decree 70/2023, private medicine companies have been authorised to increase the value of their instalments discretionally.

February will come with increases between 27 and 29 percent on average, according to local reports, to be applied on the value of January 2024. Thus, the cost of plans will have increased by over 75 percent in the first two months of 2024 – taking into account that the initial increase last month was 40 percent.

 

Driving licences, City ABL property tax

According to the Budget approved by the Buenos Aires City Legislature, increases in the cost of drivers’ licences in the City will be capped at the inflation rate recorded during the November 2022-October 2023 period. According to that data, the consumer price index rose 160.6 percent over the period

In the meantime, the ABL property tax rate will continue to be gradually updated on a monthly basis in conjunction with the Consumer Price Index (CPI) of Buenos Aires City.

 

Underground and pre-Metro services

City Hall has established an increase of 56 percent for underground fares, which began rising in January and will come in two stages.

Thus, the value of the minimum fare, applied for the first 20 journeys of the month, will rise from 110 to 125 pesos in February. This adjustment, the local government said, intends to rebalance the operating costs of the underground with the need to ensure an accessible and efficient service.

Despite the increase, benefits will be maintained for frequent users and those who enjoy discounts across the SUBE transport card network, such as those who qualify for the social tariff (pensioners, child benefit recipients, among others).

In turn, pre-metro fares will cost 43.75 pesos starting in February.

 

Bus and train hikes suspended?

Train and bus fares were updated on January 15 and the Infrastructure Ministry (now Secretariat) has already revealed that in February there will be a new increase in ticket prices.

After a public hearing conducted on January 19, a new update of fares was declared: the minimum bus fare of 270 pesos and, in the case of people with access to the social tariff, the value will be 121.50 pesos.

Whoever does not register their SUBE transport card by April 1, will pay a minimum ticket of 430 pesos.

In the case of trains, the new fares will range from 130 to 208 pesos, for all branches, starting on February 1. The 55-percent discount is maintained for those who qualify for the social tariff.

However, a federal court in Lomas de Zamora has issued an injunction, ruling that “an adequate procedure of citizen participation as required by law was not guaranteed” in said hearings.”

Developments are awaited.

 

Fuels

On February 1, the freeze of fuel taxes postponed in November 2023 by former economy minister Sergio Massa expires, paving the way for hikes expected to be around 25 percent.

The update will directly affect the prices at the pump and comes on the back of a 27-percent increase applied in January.

 

Telephones, Internet, cable

Telephone, Internet and cable providers have revealed to their customers that, starting in February, a second adjustment of rates of the year will kick in of approximately 29.9 percent, depending on the service and operator.

 

Private schools

Just a few weeks away from the start of the 2024 school year, the government has authorised private education establishments at all levels to set the value of their monthly fees uncapped.

This was formalised when a 2019 regulation by the Commerce Secretariat was repealed, giving private institutions the chance to introduce new cost structures. 

Private schools and universities may implement the adjustment they see fit and establish the conditions for access to their services without any further restrictions.

Gas and electricity

At public hearings staged by the ENARGAS gas regulator, Energy Secretary Eduardo Rodríguez Chirillo announced a “new concept” of subsidies for natural gas rates.

The official explained that, starting in April, subsidies will be determined on the basis of a “basic energy basket” covering the needs of users “with different types of use in different areas of the country.” The basket will define, based on the country’s geographic distribution, an amount of cubic metres in the case of gas for the subsidy cap. Anything in excess of that will be charged at the top rate.

In a similar hearing on electricity rates, service providers in the Buenos Aires Metropolitan Area requested an average 89-percent increase for 80 percent of their customers, in addition to a re-composition of subsidies and monthly adjustments due to inflation.

Energy transporting companies also requested a readjustment of their income by over 250 percent, which would result in a rise in the final rate of up 3.8 percent.

The Energy Secretariat must now determine the new temporary rates, until a comprehensive rate review is complete.

 

– TIMES/NA