Uncertainty Surrounds Gas Price Increase as Government Approves New Resolution”.

Removal of subsidies could lead to over 500% increases for homes, industries, and businesses

The Government will sign resolutions on Tuesday that will result in an increase in natural gas rates from April 1. This comes after the decision to remove subsidies for high-income households, businesses, and industries was delayed by two months due to inflation control efforts. Official sources have not yet provided any information on the impact of this resolution on users.

The new resolution sets wholesale gas prices at the Point of Entry to the Transportation System (PIST), which includes a combination of local production and imports. Gas is only one part of the overall bills, which also include transportation, distribution, and tax margins. It is unclear how this resolution will affect users, as no responses have been provided by official sources.

Residential users in different income categories will see varying increases in gas prices. For instance, N1 households and some non-domestic users can expect a nearly tripled gas price in April, while low-income N2 users may see a more moderate increase. The prices are expected to rise even further between May and September.

The energy sector had requested a significant increase in income to cover tariff arrears accumulated since 2019. The delay in updates and the devaluation of the peso against the dollar have contributed to the current situation. Despite these challenges, the government is working with sector executives to finalize updates that will ensure a sustainable energy system for the future.

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