As he did in May to limit the impact on inflation government will freeze rate increases again in June received by the electricity and gas distributors and transporters, including Edenor, Edesur, Metrogas, Camuzzi, Naturgy, Transener, Transportadora de Gas del Norte (TGN) and Transportadora de Gas del Sur (TGS).
In addition, the form of the update will be changed, which It will no longer be due to past inflation, but rather due to future inflation. The formula will be resumed between July and December, based on the expected price evolution going forward. The income that companies do not collect in this period will be compensated as of January 1, 2025, when the sector is “normalized” through a Five-Year Tariff Review (RTI), which will establish an investment plan in exchange for constant tariffs.
The monthly automatic indexing clause, in this way, will be suspended for the second time, on the second occasion it should have been applied. Although it was designed to keep the real value of the income of public service providers constant, the Minister of Economy, Luis Caputo, quickly took note that the formula would increase inflation and would reduce social support for President Javier Milei.
What will the June rate increases be like?
On the other hand, the Government is working on reduce subsidies to the energy received by users of middle and low income to whom official aid has been maintained since the Government began
Although there are still no definitions, in the energy sector they expect there to be increases in the bills of users N2 (low level) and N3 (medium level) only in the component of the wholesale electricity prices -Seasonal Price (PEST)- and of gas -at the Point of Entry to the Transportation System (PIST)-
Subsidies are calculated on wholesale prices. While the Government had made progress between February and April in the complete removal of subsidies to high-income or high-net-worth users (Level 1 -N1- of segmentation) and to businesses and industries, It left coverage of electricity and gas prices frozen for the middle class and households in poverty.
So much so that 65% of households currently pay just 3% to 4% of the real cost of electricity supply and 15% to 20% of gas. The Government will seek to correct this situation in the coming hours.
There will be no increases in buses but there will be increases in water
Additionally and based on the information available in the market, Clarion could know that there will be no bus increases in June (a 65% update is pending in the City and Greater Buenos Aires) and yes there will be increases in water by 2.77%, in the Buenos Aires Metropolitan Area (AMBA), where Agua y Saneamientos Argentinos (AySA) operates.
In the case of agua where he Previous increase was 209% since April -the bills tripled-, a household with an average bill without taxes of $16,000 would pay $16,443 in June; an increase of less than $500 per month. There, for the moment, The monthly indexing formula is maintained.