Gas Rates on the Rise: What You Need to Know About April’s Natural Gas Price Increase in Argentina

Removal of subsidies could lead to over 500% increases for homes, industries, and businesses

The Government has announced that it will sign resolutions on Tuesday that will lead to an increase in natural gas rates starting from April 1. This rise in bills will be most noticeable in the winter months when consumption is higher.

The official announcement comes two months later than originally planned, with the Ministry of Energy and the National Gas Regulatory Entity (Enargas) initially intending to implement the increases in February. However, the Minister of Economy, Luis Caputo, delayed the decision in an effort to control inflation. Given the fiscal situation and the state of the energy sector, the decision could no longer be postponed.

The new resolution establishes wholesale gas prices at the Point of Entry to the Transportation System (PIST), which includes a combination of local production and imports. Gas is only a portion of the overall bills, which also include transportation, distribution, and tax margins. The impact of this resolution on users is still unclear, as official sources have not provided any responses yet.

Residential users in different income categories will see varying increases in gas prices. For example, N1 households and some non-domestic users will experience a nearly tripled gas price in April, while low-income N2 users will see a more moderate increase. The prices are expected to rise even further between May and September due to subsidy removal for high-income households, businesses and industries causing price of gas to at least triple next month with another increase expected between May and September.

The companies in the energy sector had requested a significant increase in income to make up for tariff arrears accumulated since 2019. The delay in updates and devaluation of peso against dollar have contributed to current situation despite these challenges government is working with executives from energy sector towards finalizing update for sustainable energy system for future.

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