Energy and public transport rates
, water and fuel prices tend to reach an "equilibrium value" in the middle of this year
, after a rapid correction of relative prices that began after the election that confirmed Javier Milei as President of the Nation.
Precisely, these prospects of having higher income translated into a sharp jump in the shares of listed companies.
Energy
After the
removal of subsidies
for high-income households (level 1 of segmentation), this segment is once again paying the full cost of electricity, as it was until 2001 and as happened between May and August 2023 and in November of last year .
An AMBA residential user classified as "N1" had an average increase of 183% in February and will pay an average bill of $29,637 per month, according to numbers from the
consulting firm Economía & Energía
, with
monthly adjustments starting in May based on the evolution of salaries and inflation
.
Meanwhile,
middle and low-income households (N3 and N2) still maintain more than 90% of the cost of electricity with the help of the State
, but they did see the rise in the margin of transporters and distributors, just like the N1 .
For these segments, which represent more than 70% of residential users nationwide,
the elimination of subsidies would come in May, with the implementation of the Basic Energy Basket
.
The national State will only subsidize those who allocate more than 10% of their income to energy, provided that it is a "reasonable" consumption
and that they meet the property criteria such as not having a car or motorcycle that is less than 5 years old, that They have not purchased dollars or other foreign currency in the last 3 months and they do not have prepaid payments not linked to employment in a dependency relationship, among many other reasons.
At the end of 2024 there will be a Comprehensive Tariff Review (RTI) for all companies that provide public services for the transportation and distribution of electrical energy and also natural gas through networks, in which income levels and update mechanisms for the companies will be studied. concessionaires, as well as an
investment plan
that they must execute in return
to improve the quality of service
and expand their networks.
In terms of gas, the Government has not yet defined how it will transfer the real costs of supply (around $4 per million BTU) to users, who in December paid $0.70, 17%.
It is expected that increases will be noticeable in the winter, just at the time of highest consumption.
If all subsidies are eliminated and the delay in companies' margins is recognized, the jump could be more than 500% in the next quarter.
Fuels
Fuel prices, a legally deregulated market but with YPF as the leader to follow due to its market share (60%), are also close to their "balance."
After the shortage in November, in the middle of the electoral campaign ahead of the second round, there was an accelerated recomposition.
A postcard that repeats itself, queues at service stations before each fuel increase, here in San Juan at 2800Photo Guillermo Rodriguez Adami - FTP CLARIN DSC02828.jpg Z
In constant values of January 2024, the average prices of gasoline and diesel were $596 per liter in November, and rose to $867 in January, to fall to $803 in February.
The historical average since January 2010 is $827, according to calculations by the consulting firm run by Nicolás Arceo.
According to what YPF executives told their investors this week, the gap with import parity narrowed from the 28% it had reached at the beginning of October last year, but it is still at 10%.
However, sources in the sector also suggested that in the medium term, super gasoline should trend towards 1.20 or 1.23 dollars per liter, when today in the City of Buenos Aires it is around US$0.90. 0.95.
Water, trains and buses
Back to regulated regulated services, water and sewers that are in charge of Agua y Saneamientos Argentina (Aysa) would have an increase of 209%, if the Government authorizes the proposal that will be presented at a public hearing this Wednesday, March 27.
The company projected that in October it would no longer need State subsidies, for which it will also be essential to index its rates to salaries and inflation starting in May.
In times of high inflation, indexation is here to stay.
On the public transportation side, trains went to a minimum of $130 in the Buenos Aires Metropolitan Area (AMBA) and buses, $270. The increases, in this case, will be bimonthly.
The price recognized by the Government without tariff compensation is around $850 for urban buses, while companies maintain that the real cost was $1,000 in February.
Closing this gap will be more traumatic, since the values of travel expenses have a high social impact.
Transportation companies assure that the price of an urban ticket without a subsidy is $1,000.
Photo: SUBE.
The IMF and salaries
The goal that the Government has for this year with the International Monetary Fund (IMF) is to
reduce subsidies from the equivalent of 2.1% of the Gross Domestic Product (GDP) to 1.3%, of which energy subsidies would have to go from 1.6 percentage points to 1.1 pp
, an adjustment of between 2.5 and 3 billion dollars.
This program has as the other side of the coin the
increasing weight that services will have as a proportion of family income
.
According to the Interdisciplinary Institute of Political Economy (IIEP) of the UBA and Conicet, the weight of electricity and gas on an average salary indicates that for high-income households they represent 5.6% of the total;
while for the rest, between 1.6% and 1.7%.
"Home energy expenditure in Argentina is one of the lowest in Latin America and the Caribbean. Argentines allocate 3% of their budget, while the average for the region is 9.5%. In comparison, The per capita consumption of electricity in Argentine homes is one of the highest, and it is the country where that energy is cheapest," the Ministry of Energy recently argued in a public hearing to implement a new way of channeling subsidies to users.