Subsidy Removal Could Lead to Increases Exceeding 500% for Homes, Industries, and Businesses

On Monday, April 1st, the Government will sign resolutions that will result in a significant increase in natural gas rates per network. This rise in prices is expected to triple the cost of gas for some users, with further increases between May and September. The removal of subsidies from high-income households, businesses, and industries has caused this dramatic hike in prices.

The official definition of the rate increase comes two months late due to delays caused by the Ministry of Energy and the National Gas Regulatory Entity (Enargas). However, with the fiscal situation and overall context of the energy sector worsening, the decision to increase rates could not be postponed any longer.

The Energy resolution 41/2024 sets new wholesale gas prices at the Point of Entry to the Transportation System (PIST), which are a crucial part of the bill along with transportation, distribution, and tax margins. While officials have yet to clarify how this resolution will impact users differently, it is clear that some households will see a near tripling of gas prices starting in April.

Overall, gas prices are expected to rise significantly for all users between May and September, with some paying over four times their current rate depending on their location. Despite concerns about the impact on low- and middle-income households, this resolution is a part of the Government’s efforts to reduce energy subsidies and realign rates with actual supply costs.

By Samantha Johnson

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