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Montevideo, December 11th 2018 - 01:00 UTC

Argentine Senate votes 37 to 30 to freeze utility rates; Macri expected to veto the bill

Thursday, May 31st 2018 - 09:01 UTC
Full article 6 comments

Following twelve hours of heated and at time acrimonious debate the Argentine Senate on early Thursday voted, 37 to 30, to freeze utility prices. President Mauricio Macri had anticipated that if the bill was passed he would veto it because there is no way the budget can stand an additional 1% of GDP deficit. Read full article

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  • Enrique Massot

    Showing it's “my way or the highway,“ president Mauricio Macri did not lose any time vetoing the bill that was passed last night. It remains to be seen how much political hay he gets from his action.

    Macri had anticipated his veto, saying there is no other way to reduce the fiscal deficit. Critics, however, dispute such claim, pointing out that most of the money from the increases in Ciudad de Buenos Aires and parts of the Buenos Aires province goes to the privatized service providers--without a commitment to invest.

    Electricity and gas bills have increased 1,295 per cent in average since December 2015; electricity could be 1,700 per cent higher by the end of 2018, while gas is expected to be jacked up by 1,500 per cent.

    In 28 months, this is the first time the opposition unites to defeat the government in the Legislature. Previously, Macri was able to get support from Peronist legislators to pass its bills, chiefly those from provinces that depend on transfers from the central government.

    However, this time not even the friendliest legislators from the opposition could ignore demands from households and medium-size enterprises, especially those that are heavily dependent on gas or electricity.

    A couple days ago, Macri had a Eureka moment: He told the Argentines that the government had activated a website to help calculate the savings resulting in using LED lamps instead of traditional ones. He has previously recommended saving energy by wearing warm clothing when at home and to lower the thermostats. Such a display of ”presidential acumen” prompted all sorts of jokes over Twitter and other social media outlets.

    May 31st, 2018 - 05:27 pm - Link - Report abuse -4
  • Marti Llazo

    “. ...electricity and gas bills have increased 1,295 per cent ...”


    Silly reekie, as always.

    The earlier rates were so low as to be essentially free. Heavily subsidised for everyone, including high-income users. The subsidies are largely responsible for the enormous budget deficit and contribute to both high inflation and the present crisis. And the 21 percent IVA doesn't come close to covering the gap.

    The government is expected to pay something like US$4.3 billion in subsidies this year just for natural gas and electricity for consumers. Meanwhile, Argentos still pay some of the lowest utilities bills in the region, even after the increases.

    The civilised nations have long practised energy conservation measures. It's time that Argentina did, too.

    There is no free lunch, reekie.

    May 31st, 2018 - 08:01 pm - Link - Report abuse +3
  • Enrique Massot

    Hey, Marti!

    Glad you came out to still parrot some of Mauricio Macri's worst lines, combined with your usual contempt for Argentina:

    “The 'civilised' nations have long practised energy conservation measures.”

    Hear, hear.

    According to Marti, benefiting friends in the power generation business is but “conservation measures.”

    Argentines, stop complaining.

    The opposition that united behind a law to slow down the increases do not have a case and Macri was right to veto it.

    White knight Marti is telling you – all's worth ‘cause it's done to save the environment.

    “Free lunch.”

    Talk is cheap.

    Jun 02nd, 2018 - 02:00 am - Link - Report abuse -3
  • Marti Llazo

    It's unlikely that ridiculous reekie will ever understand the simple economic issues here, but for those who might, let's look at the numbers.

    Argentines pay the lowest rates in the region for their utilities. But judging by the yuge demonstration today, Reekie and the Peronchos still expect essentially free services, presumably to be paid for by the simple expedients of printing more paper money and enduring the resulting high taxation and inflation.

    Argentine per capita energy consumption is also a great deal more than that of the neighbours. Could it be that when goods and services are heavily subsidised, that certain wasteful behaviours result? Why consider energy conservation or efficient building practices when your energy is essentially free? Don't even attempt to explain the economic implications of this to reekie.

    Average residential electrical consumption in Argentina 345 KwH per month.
    In Chile, less than half of that, at about 166 KwH per month.

    Average middle class electricity bill in Argentina: about US$33 (yes, essentially free - it's about US$60 in the UK). In Chile, average middle class electricity bill: about US$47. In Uruguay, about US$59
    (The Macri government provides highly subsidised special rates for low-income households, something lacking in the last peroncho government ).

    July gas consumption/household in Bs As: about 122 cubic metres
    In Santiago CL, about 67. In Montevideo, about 67.
    And of course this is imported gas, for which the government pays premium prices. Prior to the Kirchner government, the Bs As natural gas was produced domestically. No matter- heavy subsidies result in higher consumption and waste in Argentina. (Chilenos are charged an average of 3 times as much per cubic metre for their natural gas, which is also imported - compared to rates in Argentina).

    Explain some of this to Free Lunch Reekie.

    Jun 02nd, 2018 - 04:34 am - Link - Report abuse +2
  • Enrique Massot

    In the above post, Martillazo lectures Argentines on why they should be thankful for steep increases in energy and service bills.

    By doing it, Martillazo shows the same thought process of a Macri government increasingly out of touch with reality and at odds with citizens.

    Perhaps Marti could explain the economics of how a country’s economy may improve when facing, in just two years, increases of 1,500 per cent for electricity bills, 1,300 per cent for gas bills, 1,000 per cent for water, 700 per cent for toll roads and almost 300 per cent for bus transportation.

    No, Martillazo cannot do that -- in full synchrony with Macri and the 'best team of the last 50 years,' whose only plan is to choke the country's economy and make the middle class and the poor pay the price.

    No well-informed citizen believes money from the increases will go to reduce the fiscal deficit - not even to increase capacity. The close relationship between Macri and officials with the Shell Group (of which current Energy minister Juan Jose Aranguren was senior executive) and to wealthy and well-connected Argentine families is well known.

    Nicolás Caputo, Marcelo Mindlin and Rogelio Pagano control 51 per cent of the customer base of Argentina’s public electric service.

    During 2017, when the brunt of the energy bills increases was fully felt, the owners of the public electricity service earned 440 million US dollars – that is, 40 million US dollars per month.

    Which explains why Macri did not hesitate to veto a law approved by a united opposition to put the brakes on the energy bill increases.

    However, as I said before, in Argentina the chicken never take too long to come home to roost.

    It will then be interesting to read Marti's vitriol against 'Argentines' for defeating an incompetent group of oligarchs' attempt to take the country back to their yearned, 19th century golden age.

    Jun 02nd, 2018 - 05:04 pm - Link - Report abuse -2
  • chronic

    Reeeeeeeeeeeekie:

    What are the comparative energy rates in N Korea?

    Cuba?

    Venezuela?

    Canookistan?

    Jun 03rd, 2018 - 02:50 pm - Link - Report abuse +1

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