In an effort to maintain the real value of income for public service providers, the government has announced that rate increases for electricity and gas distributors and transporters, including companies like Edenor, Edesur, Metrogas, Camuzzi, Naturgy, Transener, TGN, and TGS, will be frozen again in June. Additionally, the update will no longer be based on past inflation but on expected future inflation, with a formula to be resumed between July and December.
The suspension of the monthly automatic indexing clause for the second time aims to limit inflationary pressures on consumers. However, Minister of Economy Luis Caputo noted that this formula could increase social support for President Javier Milei. The government is also working on reducing subsidies for energy received by middle- and low-income users, with plans to increase bills for low and medium-level users in the wholesale electricity and gas components.
Despite progress in removing subsidies for high-income users and businesses, the government has left coverage of electricity and gas prices frozen for the middle class and households in poverty. Plans are in place to address the situation and correct it in the near future. The government is also considering potential increases in water bills in the Buenos Aires Metropolitan Area.
In the energy sector, it is expected that there will be no bus fare increases in June but water prices could increase by 2.77% in the AMBA where AySA operates. While some may view this as an unfair burden on households facing rising costs due to subsidy removal progression; others see it as a necessary step towards achieving long-term sustainability goals.
In summary, while some progress has been made towards removing subsidies from high-income users and businesses; more work needs to be done to ensure a fair distribution of costs across all sectors of society. As inflation remains a concern for many households; measures such as price freezes must be weighed carefully against their impact on social support systems
