The latest set of hikes in utility bills has been dominating the news cycle since their implementation, becoming the political power struggle of the moment. As the opposition has been trying to capitalize the discontent caused by the increase in the burden they represent, the federal government kicked the metaphorical ball back in their court.
Yesterday, President Mauricio Macri called governors – which includes BA City Mayor Horacio Rodríguez Larreta – to eliminate the taxes their jurisdictions charge on utility bills to reduce their cost. “That way, they will relieve the burden on every consumer, every store, and every small and medium-sized company (PyME),” said Macri at the oil and gas field being exploited by state-run oil company YPF in the Vaca Muerta region, in the province of Neuquén.
As if it had been planned – and all indicators point at that being the case – Governor of the Buenos Aires Province María Eugenia Vidal announced a few hours later that, via decree, her administration will follow through. According to La Nación, the decision will reduce the cost of residents’ electricity bills by 15.7 percent, gas bills by 6.3 percent, and running water ones by 6.2 percent. The provincial administration, on its end, will stop collecting AR $3 billion a month in taxes.
“We decided to accept the President’s request to eliminate provincial taxes that collect funds but don’t pay for the service, but rather go to the province or district’s coffers,” Vidal said in a press conference. The governor went on to say her administration intends to eliminate other taxes, but that a law is needed to do so. “We are sure the votes will be gathered quickly,” she explained Finally, she announced the provincial government has opened a phone line tasked with receiving complaints from users who believe they were charged more than what they were supposed to.
It is worth recalling, however, that in April gas bills increased in average by 32 percent nationwide; electricity by 24 percent in February; water bills are set to increase by 26 percent, with the extra detail that 30 percent of households will stop receiving the subsidies conceded by the so-called “social tariff.” Moreover, gas and electricity are set to increase again in August and September, respectively.
No other governors have announced their intention of following Vidal’s steps so far. According to La Nación, representatives of Mendoza’s government, led by the president of the Unión Civica Radical (UCR) Alfredo Cornejo, have anticipated the provincial administration will not reduce their taxes, as they took a measure of their own last year, which lowered them by four percent.
What most administrations are close to agreeing on, however, is in sharing the cost of financing the “social tariff” during the next two two-month periods when gas consumption is higher due to the lower temperatures. The step toward that decision took place yesterday at the “Federal Energy Council,” led by National Energy Minister Juan José Aranguren.
The issue is set to continue dominating the news cycle, as opposition caucuses in the Lower House have called for a special session on Wednesday, aimed at having the government roll back on this year’s increases. In case you don’t remember, they had already tried doing so last Wednesday, but fell one deputy short from gathering the 129 deputies necessary to form quorum and session.
But even if they had, they would have not been able to pass a bill. Since they called for a special session, they would have needed for two thirds of the deputies present to vote in favor of the initiative, and the Cambiemos caucus largely surpasses a third of the chamber. That same scenario will take place tomorrow.