Tuesday, April 16, 2024

ARGENTINA | 13-03-2024 17:48

Gas prices set to rise sharply as Energy Secretariat prepares to trim subsidies

Sources in Energy Secretariat anticipate new rates will be disclosed in next week; Energy companies have asked for rises above 500%.

Argentines are set to be hit with soaring gas prices with new rates set to be announced imminently.

Energy Secretary Eduardo Rodríguez Chirillo confirmed earlier this week that new gas rates would be disclosed for the whole country.

Chirillo’s announcement took place on Tuesday when he was appeared at the AmCham Summit,. He stated that “this week will bring novelties.”

Sources in the Energy Secretariat say the government will soon finalise the update of rates for supply. To date, values have been kept close to those recorded in the middle of last year.

In December, homes paid merely 17 percent of the real cost of gas supply (US$0.7 per million BTU over US$4.10), while companies have asked for rises above 500 percent.

In case they move forward with a total removal of subsidies, rates would multiply at lease sixfold. In that situation, the EcoGo consultancy firm calculated that gas could increase around 743 percent.

The coming into force of the increase has not been defined, but from the private sector they estimate that it will be effective March 15 and users will see the impact on April bills. In addition, they expect an accelerated adjustment mechanism of rates based on the evolution of wholesale inflation and retail inflation (CPI) and wages.

The update of rates will occur jointly with the removal of rate segmentation and the implementation of the Basic Energy Basket, in order to grant subsidies only to the most vulnerable sectors, establishing limits in subsidised volumes, depending on the geographic area where they live.

The public hearing to deal with the rate increase took place on January 4 and the Enargas National Gas Regulating Entity had settled everything to apply the hike starting in February, but Economy Minister Luis Caputo decided to put off the rise.



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