2027 Budget Bets on Energy Market and Cuts State Spending

The energy chapter of the 2027 Budget draft proposes a significant reduction in state participation in subsidies and infrastructure, along with greater alignment of domestic oil and gas prices toward export parity. The strategy aims to shore up fiscal balance and attract private capital to sector expansion.

Budget allocations to subsidize electricity and natural gas demand would see a real decline exceeding 70%. The scheme would preserve targeted coverage for lower-income households, while the Hogar Program would maintain assistance for LPG canister purchases, albeit with greater concentration on extreme vulnerability situations.

The Gas.Ar Plan would remain in effect to fulfill commitments through 2028, but would face a real reduction exceeding 60% in budget resources. Meanwhile, offshore exploration of the CAN200 block and projects like Fénix in the Southern Marine Basin would be entirely subject to private financing with no direct public expenditure.

Higher taxes on fuels and biofuels

Revenue from the Liquid Fuels Tax and the Carbon Dioxide Tax would reach $12.2 billion, with nominal growth of 59.3%. The draft attributes the increase to the adjustment of tax components that had remained lagging. According to projections, both levies would represent more than 20% of the final price of gasoline and diesel, compared to historical levels near 7%.

The initiative also calls for raising the mandatory bioethanol blend to 15% and biodiesel to 10%, as well as enabling major export-oriented oil companies to participate in bidding for additional volumes. In electrical infrastructure, pipelines and gas pipelines would not receive automatic Treasury funding, so expansions would be subject to private mechanisms, PPP contracts, or the MATER framework.

Planned works and guarantees include expansion of the Cauchari Solar Park, financed through a provincial credit of USD 250 million; allocations for CNEA at the Constituyentes Atomic Center and Sierra Pintada; and a guarantee of USD 20 million for the Nahueve hydroelectric project. ENARSA could receive guarantees of up to USD 500 million for gas purchases during winter peaks, while INVAP would have USD 300 million for exportable technology initiatives.