May 21, 2024 2:11 pm
Subsidy Removal Could Lead to Increases Exceeding 500% for Homes, Industries, and Businesses

This Tuesday, the Government is set to sign resolutions that will result in an increase in natural gas rates per network starting on Monday, April 1. The rise in bills will be most noticeable in the winter when higher consumption is combined with higher energy prices. Officials are yet to clarify the impact of this resolution on users, but it is known that some households will see a near tripling of gas prices starting in April.

The official definition of the rate increase comes two months late. The Ministry of Energy and the National Gas Regulatory Entity (Enargas) were prepared to implement the increases in February, but the Minister of Economy, Luis Caputo, decided to wait in an effort to anchor inflation at lower levels. Despite concerns about the impact on low- and middle-income households, the new rates will be implemented to address the energy sector’s financial challenges.

The Energy resolution 41/2024 establishes new wholesale gas prices at the Point of Entry to the Transportation System (PIST), which are a key part of the bill along with transportation, distribution, and tax margins. The decision to remove subsidies from high-income households, businesses, and industries was made due to fiscal situation and overall context of energy sector challenges. Some households paying over four times their current rate depending on location between May and September.

Overall, gas prices are expected to rise significantly for all users between May and September, with some paying over four times their current rate depending on their location. This resolution is part of government’s efforts to reduce energy subsidies and realign rates with actual cost supply

Leave a Reply