With few details, the Government launched the Gas Plan, which seeks a tax savings of US $ 1,172 million

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With few details, the Government launched the Gas Plan, which seeks a tax savings of US $ 1,172 million




Alberto Fernández in Vaca Muerta.


© Provided by Clarín
Alberto Fernández in Vaca Muerta.


President Alberto Fernández presented the Gas plan this Thursday in Vaca Muerta, with projections for tax savings and ambitious import substitution. The companies will charge US $ 3.50 / US $ 3.70 per million BTUs extracted. Of that amount, the distributors will pay between US $ 2 and US $ 2.50, while the State will pay between US $ 1 and US $ 1.50.

The contracts will be concluded for four years. According to the Executive Branch, the modality it will mean a saving of US $ 5,629 million in import substitution and there will be a fiscal saving of US $ 2,525 million with respect to the current scheme.

Gas distributors should be paying $ 185 per million BTUs delivered, that is just over US $ 2. However, the firms are not complying with that forecast. Metrogas advised that it will not pay gas bills for the last quarter.

So that distributors can pay between US $ 2 and US $ 2.50 for the gas delivered, they should be able to raise rates. The Government does not contemplate that possibility for this year. For the next one, a portion of the ruling party believes that this possibility will be advanced (encouraged by the Minister of Economy Martín Guzmán), while another (headed by Federico Bernal, inspector of Enargas) oppose this possibility.

The Government believes that the new stimulus plan will allow an increase in the collection of US $ 2,525 million for the national State and the provinces. The Ministry of Energy did not explain how that figure is formed.

The ceiling price to be paid is US $ 3.70 per million BTU. There will be an allocation by basins (Neuquina, San Jorge), but they were not specified either.

As they say in the sector, the producers will compete to place their production. The base is 70 million cubic meters per day, which will be taken by the distributors or Cammesa – the electric wholesaler that buys gas to deliver to the plants. The difference between what the distributors and Cammesa pay (that number between US $ 2 and US $ 2.50 per million BTU) will be paid by the State. During 2021, this would be around US $ 1,491 million.

According to the Government, the production companies undertook to pour out US $ 5 billion for these stimuli. Until now, there are no known plans of the companies that can identify where those investments will be or who will do it.

The new scheme will have a fiscal cost of US $ 5,062 million for the period 2021-2024, which will generate a “tax savings “of US $ 2,574 million. The Executive Branch did not detail how this figure was obtained. It is supposed to have to do with lower imports.

“The program will encourage investment and gas production, to satisfy domestic demand with Argentine gas. It will boost job creation and development in the producing regions, both of its SMEs and regional companies and of the rest of the industry and national technology, “according to the official announcement.

According to the presentation, the encouragement of national production “replaces LNG imports and the consumption of liquid fuels, which generates long-term certainty.” It is not clear how much the volume of import substitution will be, nor the price that would be paid for it.

“This gives predictability of price and contractual term to producers, normalizing a gas market that in recent years had severe distortions, to efficiently satisfy demand from all segments,” according to official guidelines.

How is the plan, according to the Government

The statement distributed by the Ministry of Energy summarizes the official plan as follows:

– It will be possible to substitute imports, generating savings of about 5,629 million dollars and a fiscal saving of 1,172 million dollars until 2023.

– An estimated increase in the collection of US $ 2,525 million, with equitable participation of all producing regions.

– Will generate thousands of direct jobs to operate new drilling equipment and fracture sets.

– With the new scheme the total fiscal cost will be US $ 5,062 million for the 2021/2024 period, which it will generate a total tax saving of US $ 2,574 million.

– The program will encourage investment and gas production, to satisfy domestic demand with Argentine gas.

– It will enhance job creation and development in the producing regions, both their SMEs and regional companies as well as the rest of the industry and national technology.

– The rights of current and future users and consumers are protected.

– Guarantees jobs in the production chain, promoting national aggregate development in the value chain of the entire gas industry.

– Replaces imports of Liquefied Natural Gas (LNG) and the consumption of liquid fuels, and generates long-term certainty in the production and distribution sectors.

– Contributes to the balance of the surplus energy balance to the Government’s fiscal objectives.

– I know reverses the decline in production, with substitution of more than 18,000 MMm3 of gas and imported labor, increasing the National Added Value in employment, work for SMEs and regional companies, products and services of Argentine industry and technology.

– The investment of the Production Companies throughout the Scheme will beequivalent to US $ 5,000 million.

– The increase in tax collection at the national, provincial and municipal levels will be US $ 2,525 million.

– Provides predictability of price and contractual term to producers, normalizing a gas market that in recent years had severe distortions, to efficiently satisfy the demand of all segments.

– Allows harmonizing the situation between the necessary price that encourages investments with the rate that the residential user can afford.

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