The Government defended the tariff segmentation and said that the current subsidy scheme is "pro-rich"

The public hearing held this Thursday, May 12, by the Ministry of Energy to discuss the segmentation in the granting of subsidies for gas and electricity services, ended this afternoon and closed, in turn, the call developed since Tuesday that also analyzed the update of generation rates.

After more than five hours of hearing, the Undersecretary of Strategic Planning, Santiago L├│pez Osornioclosed the debate to which 59 speakers had signed up to participate online on the national government’s segmentation proposal.

Alberto Fernández redoubles the pressure and threatened to fire officials who do not accompany the rate increase

Osornio, at the opening of the debate, stated that the current energy subsidy scheme is “pro-rich” and that “there is room to improve distributive efficiency” by presenting the benefit in a “uniform way for all users regardless of their socioeconomic situation.”

“Today the State covers more than 75% of the cost of gas and electricity that is included in the bill” and since no distinctions are made based on socioeconomic capacity, except for the implementation of the social rate, “The 50% of (the population with) higher incomes receive 60% of the electricity subsidies”he stated.

Prices applicable for June 1

The series of three hearings began on Tuesday with the treatment of the new prices at the point of entry to the transportation system (PIST) applicable from June 1, 2022.

On Wednesday, the new seasonal reference prices for the seasonal price of electricity (PEST) were analyzed.

How the reduction of energy subsidies can impact as requested by the IMF

In both cases, the official proposal is for residential users who consider as an objective criterion a “tariff correction related to the evolution of their income”, represented by the salary variation coefficient (CVS).

For 90% of residential users, this mechanism guarantees that rate updates are always lower than salary increasesimplying corrections in their bills that are less than the increase in income in real terms.


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