LatinNews Daily - 29 May 2024

*Argentina’s government led by President Javier Milei has published a decree (465/2024) making changes to the country’s energy subsidy scheme, stating this will move from a “generalised and indiscriminate” system to “a more orderly system focused on vulnerable users”. In a statement, the energy ministry announced that a transition period of six months (extendable for another six months) would be established based on the evolution of the general economic situation and the dynamics of the energy sector. The new system enables the progressive transfer of real energy prices and tariffs (without subsidies) to end users in the middle- and low-income segments, which had previously received subsidies of 40% and 80% respectively. “The previous subsidy regime, together with the energy policy of tariff freezing, contributed substantially to the opacity of the final tariffs and to the conceptual confusion between the amounts actually billed to users and the subsidies,” said the energy ministry. “This is contrary to the economic interests of the users themselves… In times of scarcity and adjustment of State resources, it is necessary to review and reorder subsidies, in a progressive manner, in order to contribute to fiscal balance without neglecting assistance to vulnerable users.”