The Ministry of Energy reported that the amount paid to generators increased by 11%. This increase impacted the electricity bills of users who no longer have a subsidy, that is, those with high incomes (5.3 million households) and medium incomes (2.8 million). Industries and businesses were also affected.
Meanwhile, preparations began for the public hearing to determine the new increase in the gas rate, which is expected to take place in the month of November.
Within the framework of the Extended Facilities agreement signed with the International Monetary Fund (IMF) at the end of July, the Government committed to “adjust electricity prices from September 1, for low- and middle-income residential users, in accordance with legislation and agreed cost recovery objectives.” This measure would also apply to natural gas prices.
Budget Increases
According to the 2024 Budget sent by the national government to Congress, the policy of segmentation and increases in electricity and gas rates will be maintained during 2024 in line with the reduction of subsidies and the adjustment in public spending within the framework of the agreement. with the IMF.
According to the documentation sent by the Ministry of Economy to Deputies, the Energy, Fuels and Mining “function” would have current transfers for $3.86 trillion next year, which would be equivalent to 1.1% of the Gross Domestic Product (GDP). ). In real terms, there would be a fiscal adjustment of 0.4 percentage points in relation to the projected spending on subsidies for the current year, reported the newspaper El Cronista.
“By 2024, it is expected that 62.63% of the wholesale costs of the electricity system will be covered by the electricity rates paid by users, each of them with different tariff treatments”indicated the message signed by the Secretary of the Treasury, Raul Rigo which is part of the Budget.
Furthermore, in the ‘law of laws’, the Government maintained the public sector deficit target at 1.9% between redirecting subsidies, cutting transfers and reviewing capital spending, but the post-electoral thawing of rates will be key to approving the November review with the Fund and access the remaining SDRs for the rest of the year.
