The Argentine government announced steep hikes for public services’ tariffs in April, ranging between 150% and 500%. Without a final number in place yet, some analysts are warning it could be even higher.

The increases, implemented to reduce or eliminate subsidies and thus improve the fiscal balance of the public sector, are expected to raise April’s inflation rate. Interannual inflation for February was 276.2%, according to the National Institute for Statistics and Census (INDEC).

As of now, the Energy Secretariat has increased natural gas tariffs by at least 150%, the Public Works Secretariat has approved a 209% rise in Buenos Aires water fares, and the National Electricity Regulation Office (ENRE) announced hikes starting at 120%. These new prices came into effect on April 1.

In the case of gas bills, the government and analysts differ on the percentage of the raise. Juan José Carbajales, from the Paspartú energy consulting firm, told the Herald that the government increased the fixed fare and its incidence in the final price in an effort to reduce the difference in costs between summer and winter. The government also increased production and transportation costs.

The fixed fare, which also started to be charged monthly instead of every two months, is the part of the bill that remains unchanged regardless of user demand. In some cases, it increased by 1,000%. The crux of the matter is that analysts differ on what would be the impact of this raise on the final bill.

The Energy Secretariat posted a chart on X saying that users consuming 100 cubic meters will pay AR$15,830 (US$17.5 at the official rate), AR$23,678 (US$26.1), and AR$24,285 (US$26.8), depending if they are from a low, middle, or high-income home, respectively. That would mean increases ranging from 150% to 500% after taxes.

Going forward, the government instructed public company ENERGAS to issue tariff charts with new prices that reflect the variation of the exchange rate between the U.S. dollar and the peso every month. In essence, it means dollarizing part of the natural gas tariffs. 

Hikes in water and electric power bills

Moreover, two ENRE resolutions established the new tariffs for users of Edenor and Edesur, the two energy companies that provide service in Buenos Aires City. The Energy Secretariat decided that it would update the price of the production cost (close to 40% of the natural gas tariff) according to how much the price of the U.S. dollar changes, i.e., how much the peso devalues. Increases compared to the current rates range between 120% and 300%, according to a user’s income level.

Additionally, the Public Works Secretariat approved a 209% increase in running water tariffs, requested by Argentine Water and Sanitation (AySA, by its Spanish acronym), a state-owned company providing running water in the Buenos Aires area.

According to the resolution approving the raises, the water tariff has been subject to “inadequate policies that have promoted waste and inefficiency, compromising the financial sustainability of the company.” 

“Past administrations maintained artificially low tariffs, which not only disadvantaged the rational use of water but also prevented the necessary investments to improve the efficiency of the service,” it added.