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Rates: the Government talks about pesifying but already has committed payments in dollars

2021-03-02T15:01:44.329Z

He promised to pay gas producers in US currency. Electricity generation is also managed in that currency.



Martin Bidegaray

03/02/2021 11:03

  • Clarín.com

  • Economy

Updated 03/02/2021 11:03

President Alberto Fernández promised on Monday that he would send a bill to Congress "that declares the emergency of public and regulated services with the aim of

definitively

de-

dollarizing them

and adapting them to an economy in which

income is in pesos

."

However, his government

already has commitments in US currency

both for the provision of gas and for electricity generation.

At the end of 2020, the Executive Branch launched a stimulus for the sector called

the Gas 4 plan.

There it promised to guarantee the supply of 70 million cubic meters per day

for 4 years

.

For that, he promised

growers that they will charge an average of US $ 3.50

per million BTU (the sector's unit of measure).

In the middle of the month, there will be two public hearings to decide the future of gas rates.

One will discuss precisely

how those US $ 3.50

per million BTUs that producers expect to collect will be paid.

A part

will be covered by the "demand" (households)

and the rest will be provided by the national State through subsidies, according to official sources.

The Government promised that the gas companies will allocate US $ 6.5 billion to produce the gas that is in this plan.

The Secretary of Energy, Darío Martínez, admitted that he will allocate US $ 600 million to that gas during the first year (2021) and that this amount will increase.

Those US $ 600 million only correspond to the part of the gas that will be delivered to households or the so-called “priority demand”.

The total, which includes other uses,

can double.

In electricity generation there are also several dollarized components

.

The price of gas is one of them.

Cammesa, the wholesale administrator of the electricity system, is putting out to tender purchases of large gas shipments that are then used in generation.

By March, it promised to pay US $ 2.60 per million BTUs.

“If they don't pay me the Gas plan in dollars, as they promised, it's easy,

I'll stop investing

.

In our project it is

not useful to charge in pesos

”, said a businessman in the sector, owner of an energy company, who has a good relationship with the Government.

"The monomic cost (of electricity generation) is expressed in pesos, but many of its components, such as the gas that is purchased, are in dollars," he said.

The Executive Branch confirmed that this year a gasifier ship will return to Bahía Blanca (which left in 2018), since local production is insufficient to cover the demand in winter.

Imported gas will be needed.

That supply will also be requested from Bolivia, in a long-standing contract.

What arrives by foreign ships and gas pipelines

will be paid in dollars.

“The government may have the idea of ​​'pesifying' whatever it wants.

The costs are in dollars.

What households and businesses do not pay, the State will pay through subsidies.

There is not much more to do ”, stressed three executives consulted, who

do not want to argue

with the Executive Power.

“If we continue with the comprehensive review system (of rates) in force that we inherited from the previous government, gas should have increased by 80% in October 2019 and should have increased by 130% in April of this year.

Electricity, for its part, should rise 168% next April, ”Fernández told legislators.

From the previous administration they refute those numbers.

They also observe that

the weight of the State grew again as the main supporter of energy costs.

The Government has kept the rates frozen since December 10, 2019. An increase in gas is planned for April.

In electricity distribution, several provinces have already applied increases, but Edenor and Edesur - under the orbit of the national State - still have not even called a public hearing.

"Now is the time to regularize the rate system that was frozen all this time (...) My final goal is to be able to achieve differential rates according to the patrimonial capacity of the person receiving the service.

The ultimate purpose is

that the State subsidies only protect those who require it

, ”said Fernández.

This theory supports some guidelines from the Ministry of Economy, where they want to raise rates up to 50% (and more) for higher-income sectors.

Other sectors of the ruling coalition are opposed.

“The creation of this new rate schedule is

going to take months

.

Until we can formulate a new comprehensive rate review, I think it is important to mark a path in the price of electricity, gas and other services rates for next year, ”said Fernández.

NE

Look also

Earnings, monotax and de-dollarization of rates, among the economic axes of the Government

Rates: second hearing announced and gas increase accelerates

From March, industries and businesses will pay up to 50% more for electricity

Source: clarin

All business articles on 2021-03-02

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