Argentine consumers of gasoline, diesel, electricity and natural gas through networks paid 80% of the real costs in August 2024 of supply, a figure that in November 2023 – the last full month before Javier Milei took office as president – was only 62%.
A study by the former Secretary of Energy Gustavo Lopetegui found that monthly sales without Value Added Tax (VAT) in August were equivalent to 4,434 million dollars in fuel, electricity and gas; of which US$ 3,568 million were paid by users, some US$ 756 million by the national State, US$ 96 million that the oil companies stopped collecting and US$ 14 million by the electricity distributors.
The photo from the eighth month of the year shows how far the La Libertad Avanza chainsaw has advanced and also how long it will take until it stops. If the State were to withdraw completely, consumers would need to have an average increase of 24% in energy prices to cover all costs.
“In November 2023, this necessary adjustment reached 60%. A brutal correction was made in the first months of the Government and now there is not much left. The rest of the increases can be done gradually“said Lopetegui when asked about Clarion.
Of course, the averages hide significant variations. In gasoline and diesel, cost coverage in November 2023 was 60% and in August 2024 it rose to 82%, with increases in fuel and taxes.
The national State still gives up tax collection for 332 million dollars a month by not raising taxes as much as the law allows, equivalent to 0.6% of the Gross Domestic Product (GDP) projected in one year.
In electricity, in turn, coverage went from 69% to 75%, but electricity generation, which demands the most subsidies (0.5% of GDP), barely grew from 56% to 60%.
Once again, the average hides data inside: according to Julián Rojo, economist at the General Mosconi Argentine Energy Institute (IAE) and the Interdisciplinary Institute of Political Economy (IIEP) of the UBA, in the accumulated period of 2024, households covered on average the 40% of the electrical cost; and non-residential users, 89%, which gives an average coverage of 52% in nine months.
“The point in the rates is to see how they are going to manage the increases to low and medium income users (N2 and N3, respectively), who are very behind and are 70% of residential demand. It is important because these users are going to determine whether or not the estimated coverage is reached,” said Rojo.
And he warned: “The contingency plan for the summer will mean supplying demand at whatever cost: maximizing imports and adding additional remuneration to thermal power plants, which are already expensive.”
Meanwhile, Gonzalo Lacunza, an analyst at Empiria Consultores, said that “since October, gas coverage would be around 80% and electricity coverage would be 70 to 75%. This is due more to a drop in gas costs than to such an increase. of tariffs”.