The National Gas Regulatory Entity (Enargas) today convened a public hearing for March 16 to increase the transportation and distribution component of gas rates. It is a segment that represents around 30% of the final price of the invoice.
Last week it was the Ministry of Energy who called another public hearing, in that case to determine what percentage of the price that will be paid to gas producers will be financed by users with tariffs, and how much the State will cover with subsidies. The value of the supply reflects around 50% of the price of the final tariff.
“The Public Hearing will be held on March 16, 2021 virtually from the Autonomous City of Buenos Aires, it will begin at 9:00 am, and the participation of the interested parties will be exclusively virtual or remote, according to the recitals of this act “, says the resolution of Enargas, which will be published tomorrow in the Official Gazette.
Gas rates are frozen since April 2019. While the production companies – among which are YPF, Tecpetrol, Total, Wintershall and Pluspetrol – have already fixed an average price that they will receive for the supply, the distribution companies (Metrogas, Camuzzi and Naturgy, among others) and the transporters (TGN and TGS) have not had an update of their values for almost two years.
This generated a break in the payment chain last year, when Metrogas announced that it had to refinance its obligations with producers, after it failed to cover its expenses in the winter. For this year, with an accumulated inflation of 70% since the last update, the break in the payment chain could reach other companies, which do not have enough income to cover their costs.
According to market sources, The idea of Enargas is to grant an increase of between 25% and 30% to distributors and transporters, which would reflect a final increase in rates of 9% approximately.
Nevertheless, If the Ministry of Energy decides to also advance with the price increase in the gas component, the final increase in gas rates could reach 30%. In relation to last summer, the bills would reflect a greater rise, since in the winter the residential demand for gas also quintupled, so the bill would rise in price and quantity.
Due to the Gas Plan launched by the Government at the end of last year, It was agreed that the oil companies will receive an average price of US $ 3.5 per million BTU (English measure used in the sector). This value increases to US $ 4.55 for the winter gas supply, when demand increases.
Last December, users paid US $ 2.3 a million BTUs with their rates. The rest was covered by the State with subsidies. The problem is that every time the currency is devalued, as the rates have a fixed price in pesos, the collection is enough to cover a smaller part of that final price. Today, for example, users pay US $ 2.15. In other words, each time the dollar rises, the Treasury has to make more transfers.
Therefore, if the rates are not updated, and if the dollar ends at a value of $ 102.4 by the end of the year, as projected by the Minister of Economy, Martín Guzmán, the user will end up paying US $ 1.87 per million BTU. In the calculations they do on the economic portfolio, so that subsidies do not increase as a percentage of GDP, the price paid by users should increase by at least 35%, so that they continue to cover US $ 2.3 of the final price.
Still It is not known what Vice President Cristina Kirchner will define on this subject, which is the one who has the last word on the subject of rates. According to the Peronist manual, which is repeated by officials close to the former president, “no tariffs are increased in an electoral year.”
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