Natural Gas Rates to Triple for High-Income Households, Businesses, and Industries from April 1st

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

The government has announced that natural gas rates will increase from April 1st, with high-income households, businesses and industries facing a triple price hike next month. This rise in bills is expected to be most noticeable in the winter months when consumption is higher.

The official announcement comes two months later than originally planned due to inflation control efforts by the Minister of Economy, Luis Caputo. However, given the fiscal situation and energy sector challenges, the decision could no longer be postponed.

The new resolution sets wholesale gas prices at the Point of Entry to the Transportation System (PIST), which includes local production and imports. Gas prices are only a portion of overall bills that also include transportation, distribution and tax margins. Official sources have not yet provided any information on the impact this resolution will have on users.

Residential users in different income categories will see varying increases in gas prices. For example, N1 households and non-domestic users can expect a nearly tripled gas price in April while low-income N2 users will see a more moderate increase. Prices are expected to rise even further between May and September.

Companies in the energy sector had requested significant income increases to cover tariff arrears accumulated since 2019 as well as currency devaluations against the dollar that contributed to current challenges. Despite these difficulties, the government is working with sector executives to finalize updates for a sustainable energy system for future use.

Overall, this increase in natural gas rates is likely to have a significant impact on consumers’ energy bills and may lead to inflation concerns if not managed carefully by policymakers.

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