Cold Zone Reform Could Strip Automatic Subsidy From 94 Buenos Aires Municipalities

The Senate will address this Thursday the reform bill of the Cold Zone regime, which already has half approval from the Chamber of Deputies. If approved without changes, the automatic benefit on gas bills would be restricted to users in Patagonia, Malargüe and the Puna.

In the province of Buenos Aires, the measure would affect 94 municipalities and approximately 1.24 million households. Patagones would be the only Buenos Aires jurisdiction to retain the general subsidy due to its formal belonging to the Patagonian region. At the national level, the potentially affected universe would reach around 3.35 million users.

The initiative also modifies the way the discount is calculated. Instead of applying to the total bill, the subsidy would apply only to the System Entry Price for Transport (PIST). The Distribution Added Value, trunk transport and taxes would fall outside the subsidized base. For users who remain in the historical regime, estimates discussed during parliamentary debate foresee an increase close to 25%.

Households that lose automatic coverage may apply for the Focused Energy Subsidy (SEF) if they meet established vulnerability criteria. The bill sets income reference up to three INDEC Total Basic Food Baskets and provides direct access for persons with a Family Housing Certificate, Falkland Islands veterans or household members with a Unique Disability Certificate, subject to evaluation by the Energy Secretariat.

In Bahía Blanca, a projection cited during debate estimated that a family with monthly consumption of 118 cubic meters could go from paying $19,945 to $39,890 if excluded from the focused scheme. For those who do access the SEF, the calculated increase would be 22%. Energy Secretary María Carmen Tettamanti noted that users in temperate zones who lose the benefit would face an approximate monthly increase of $15,000.

As part of negotiations to secure votes, the Government agreed with northern governors to expand electricity subsidies during months of highest temperatures. The commitment contemplates raising subsidized blocks for warm and very warm zones, although the measure was not incorporated into the legislative text and should be implemented via subsequent resolution. The reform projects savings of $272.099 billion, partially offset by an additional cost of between USD 71 million and USD 90 million annually for the electricity scheme.