Starting this Monday, the national government will carry out three successive public hearings to define the new prices that will be in force as of June 1 for natural gas at the wellhead, the seasonal cost of electricity generation and the segmentation of rates that you allows reducing the weight of energy subsidies in public accounts.
In this way, the tariff updating process defined by the Executive Branch in the economic program begins, which aims to achieve “reasonable tariff levels that can be applied with criteria of justice and distributive equity” for public gas and electricity services. electricity, as stated by the Secretary of Energy in the summons to the hearings.
In the first of the public hearings convened to this Monday -starting at 10-, which will take place through the Webex Platformthe new prices will be discussed at the Point of Entry to the Transportation System (PIST).
On Tuesday, for its part, the new seasonal reference prices of the Seasonal Price of Electricity will be discussed (PEST).
Meanwhile, on Wednesday the implementation of the segmentation in the granting of energy price subsidies by the National State to users of the natural gas service and the electricity service will be discussed, for the 2022-2023 biennium.
On this issue, The Government proposes to address subsidies through segmentation by ability to payreduce them significantly in the highest-income sectors to simultaneously solve “the pro-rich bias and the inefficiencies derived from both residential consumption in those sectors and the inefficiencies of public spending.”
As for the tariff updates that will be reason for The first two hearings seek to promote a scheme aimed at “protecting the most vulnerable sectors with the least capacity to pay.”and in turn encouraging the “adoption of measures that promote the rational use of services and the reduction of environmental impact”.
For residential users, a “tariff correction related to the evolution of their income” will be considered as an objective criterionrepresented by the salary variation coefficient (CVS), as established by Law No. 27,443, frustrated by the total veto imposed by the Cambiemos administration.
For 90% of residential users, this mechanism guarantees that rate updates are always lower than salary increases, implying corrections in their bills that are less than the increase in income in real terms.
In this way, the scheme proposed by the Secretary of Energy for the 2022-2023 biennium contemplates that gas users who benefit from the social rate will not have another increase in their bill this yearand by 2023, that correction will be equivalent to 40% of the previous year’s CVS.
Meanwhile, for the beneficiaries of social rate of electricity distributors Edenor and Edesur, the new rate correction by 2022 it will not exceed 6%.
For all other users, the total increase in the invoice for each calendar year will be equivalent to 80% of the Salary Variation Coefficient corresponding to the previous year.
Based on this scheme, by 2022 and considering the tariff update carried out in March, the proposed increase for June will be an average of 17% for electricity rates for AMBA users, and an average of 21.5% over the current value of the bill for gas users throughout the country.
Lastly, the strip of 10% of users with higher incomes and with full payment capacity will no longer be beneficiaries of the energy consumption subsidy.
The crossing of the information addressed what was available by distribution companies, entities and regulatory authorities of electricity and natural gas from the residential network available in the National Tax and Social Identification System (SINTyS) on income and assets.
If supplies are taken as a reference, this segment would include up to 1,631,846 electricity service users, representing 10.1% of the surveyed universe, and 1,178,248 residential gas supplies, representing 12.9%, according to to the official report.
Regarding the level of income and the impact of the eventual elimination of subsidies, the report analyzed that the top decile received an average subsidy in electricity of $49,452 in 2021, and in natural gas of $23,312, for which with an income per household average of $3,258,861 per year, the full payment of services would have an impact of 1.5% and 0.72%, respectively.
The energy portfolio arrived at these figures by evaluating alternatives for the allocation of subsidies based on socioeconomic aspects such as energy consumption, income level and wealth; or to geographic-spatial variables associated with the value of the property and urbanization.
Thus, in the segment with the lowest level of subsidies, the definition is defined by one of the spatial criteria linked to being located within polygons with high payment capacity or being in the register of gated communities.
Regarding the socioeconomic criteria, the condition of having income greater than 3.5 total basic baskets (CBT) was identified; have 3 or more registered properties; have 3 or more vehicles less than 5 years old and have luxury planes or boats.
In the case of the segment with the highest level of subsidies, inclusion could be defined by being located within polygons identified by the National Registry of Popular Neighborhoods (Renabap) or among the socioeconomic criteria being retired, pensioned or workers in a dependency relationship or monotributistas who receive a gross remuneration less than or equal to two minimum wages, vital and mobile.
