Tripling of Natural Gas Rates: What You Need to Know About the Upcoming Changes in Energy Bills

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

The Government is set to sign resolutions on Tuesday that will result in an increase in natural gas rates starting from April 1. The subsidies for high-income households, businesses, and industries will be removed, causing the price of gas to at least triple next month with another increase expected between May and September. 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 due to delays caused by the Minister of Economy, Luis Caputo. Despite the fiscal situation and the state of the energy sector, Caputo had delayed the decision to control inflation. However, given the current circumstances, this 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 overall bills that also include transportation, distribution, and tax margins. The impact of this resolution on users remains unclear as official sources have not provided any responses yet.

Residential users in different income categories will experience varying increases in gas prices. For instance, N1 households and some non-domestic users will see a nearly tripled gas price in April while low-income N2 users will experience a more moderate increase. Prices are expected to rise even further between May and September due to increased demand during peak usage periods such as winter months when consumption is higher.

Companies in the energy sector had requested significant income increases to make up for tariff arrears accumulated since 2019 due to delays in updates caused by devaluation of peso against dollar which has contributed significantly towards current challenges faced by these companies.

Despite these challenges, the government is working tirelessly with executives from various sectors involved in energy production and distribution to ensure a sustainable energy system for future generations.

In summary, while there are concerns about rising natural gas rates following removal of subsidies for certain groups, it’s important for consumers and businesses alike to understand how their bills will be affected by these changes so they can plan accordingly beforehand.

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