The Secretary of Energy proposed this Tuesday a 20% average increase in the natural gas service for users without a social rate, an increase that takes into account the income of the people because it takes as a reference the Coefficient of Salary Variation, according to what was stated in the first of a total of three public hearings that will take place until Thursday.
The official position was presented at the hearing, which was held virtually, by the Undersecretary of Hydrocarbons, Maggie Videlato consider the new prices of natural gas at the Point of Entry to the Transportation System (PIST) that will be in force as of June 1.
Videla pointed out that the beneficiaries of the social rate will have an increase equivalent to 40% of the Salary Variation Coefficient, and 80% for those who do not enjoy that benefit.
Thus, with a CVS in 2021 of 53.4%, those adjustments for the full year should be 21.3% and 42.7%, respectively.
Videla recalled that rate increases were made in February and, taking gas distributors from four different regions as an example, pointed out that due to the variations approved in a timely manner, “it would not correspond to make any correction” in the case of the beneficiaries of the social rate.
As for those who do not have this benefit, which Videla characterized as “common citizens”, the increases arranged in February were between 13.7% and 20.5%with which it would be necessary to apply the remaining increases of up to 25.5% for those who do not have a social rate.
For social rate beneficiaries, it is ensured that there will be no increases for the rest of the year.
President Alberto Fernandez supported this updating scheme by assuring from Spain, where an official visit began on Tuesday, that the proposals are to adjust the rates “taking into account the income of the people.”
In an interview given to the Spanish newspaper El País, the head of state pointed out that the government proposed “an adjustment of rates following a law voted by those who have now opposed it,” in reference to the criticism of the increase raised by a sector of the Front of all.
This Tuesday’s session -which lasted almost three and a half hours- marked the start of the rate update process defined by the Executive Branch in the economic program, with which it seeks to achieve “reasonable rate levels that are likely to be applied with criteria of justice and distributive equity” for public gas and electricity services.
At Wednesday’s hearing, the new seasonal reference prices for Electric Power (PEST) will be discussed, and on Thursday the implementation of segmentation in the granting of energy price subsidies by the State to users will be discussed. of the natural gas and electric power service, for the biennium 2022-2023.
The Minister of Economy, Martin Guzmanparticipating this Tuesday morning in a forum organized by the United States Chamber of Commerce in Argentina (Amcham) reiterated that “in the face of a historic opportunity, energy has a transforming potential in the economy” by understanding that “orders and normalizes the fiscal situation and leads to a reduction in energy subsidies”.
“From the productive point of view, because if we have a larger scale of production, we are going to have different production costs, which gives our entire productive structure more competitiveness. From the macroeconomic point of view, it has an impact on exchange rate stability, on the stability of the balance of payments”, underlined the minister when defending the segmentation scheme.
The review of the energy subsidy scheme was one of the points agreed upon last March between the national government and the International Monetary Fund (IMF), upon announcing the refinancing of the US$44 billion debt that the country maintains with the multilateral credit organization. .
In Tuesday’s hearing, it was highlighted that the National State covers with subsidies 75.6% of the total cost of natural gas destined for priority demand, with higher percentages in the winter months, according to Videla’s report.
The official pointed out that, as a result of the increases in international prices due to Russia’s invasion of Ukraine, the cost of supply is equivalent to 5.76 dollars per million BTU (British Thermal Unit, according to its acronym in English). ).
Of this amount, the average cost faced by the national State is 4.35 dollars and that of the user is 1.41 dollars.
