Gas Rates Set to Increase by Up to Triple in April: Government Announces Wholesale Pricing Changes and Varying Price Hikes for Residential Users.

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

The Government is poised to sign resolutions on Tuesday that will result in an increase in natural gas rates starting from April 1. This decision has been two months in the making, with the Ministry of Energy and the National Gas Regulatory Entity (Enargas) initially planning to implement the increases in February. However, the Minister of Economy, Luis Caputo, delayed the decision in an effort to control inflation.

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, which also include transportation, distribution, and tax margins. Official sources have not yet provided any details on how this resolution will affect users.

Residential users will see varying increases in gas prices depending on their income category. For example, N1 households and some non-domestic users can expect 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.

The energy sector had requested a significant increase in income to cover tariff arrears accumulated since 2019. The devaluation of the peso against the dollar has contributed to this situation, as have delays in updates. Despite these challenges, the Government is working with sector executives to finalize updates that will ensure a sustainable energy system for the future.

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