The regulated price increases that arrive with April

As has been the case since mid-2022, more and more rates and prices for regulated services have a monthly increase, either through agreements between the parties with the Government for predetermined updating due to the variation in the CPI of the previous INDEC, which which continues to put pressure on the acceleration of the inflation rate.

Among the increases that will be applied next month are the transportation items in the AMBA (6.6% for bus and train fares); electric power in the AMBA; private schools (3.8%); prepaid medicine (2.36%); rentals (92.5% per year), among others.

“Even within the framework of the political decision to reduce subsidies, the prices of regulated services showed an evolution very similar to that of prices in general until February 2023. During the last 6 months, regulated prices grew at an average of 5.9%, the same value as the general index and barely two tenths above core inflation (5.7%). Therefore, a real increase in the price of services has not yet been verified. The increase in electricity, gas and transportation is still a long way to go and will surely put a lot of pressure on the March and April indices,” he told infobae the Economist Pablo Besmedrisnikpartner of VDC Consulting.

The economist highlighted that the evolution of the wholesale prices of electrical energy (10.8% in February) and of imported products (9.2%) will put pressure on these sides in the coming months in the retail and retail channel. public.

“The tendency to generate a faster frequency of adjustments in different sectors of the economy continues to consolidate. The adjustments left the quarterly dynamics in some services or semi-annual in salaries, to become a path of almost monthly adjustments. We are approaching an almost indexed economy,” warned Besmedrisnik.

The acceleration in inflation is generating a greater drop in the purchasing power of the population with fixed incomes that are updated quarterly or at greater intervals. According to the Ripte (Average taxable remuneration of registered stable workers) it grew by 88% in 12 months, 11 percentage points less than general inflation and 22 percentage points below the variation in the value of the basic food basket.

“The loss of purchasing power is reflected in the fact that at the beginning of 2023 with an average salary of a registered worker you can buy 2.8 basic food baskets for a family of four members. At the beginning of 2022, 3.1 could be acquired, while during the first months of 2018 four CBAs could be available”, described Pablo Besmedrisnik.

Purchasing power measured in terms of food baskets fell 30% in just five years, the economist noted.

The adjustments planned for the next month:

Since March 1, the rates for buses and trains in the AMBA are updated monthly according to the inflation index reported by INDEC, corresponding to two months before. In April, transportation fees will increase 6.6 percent.

In this way, the minimum bus ticket – trips of less than 3 kilometers – will go from $37.10 to $39.54. While the highest ticket -trips from 27 to 44 kilometers- will go from $50.88 to $54.23. In the case of the train ticket, the minimum will rise from $18.02 to $19.20 for the Roca, Belgrano Sur, Belgrano Norte and Urquiza lines. And from $23.32 to $24.85 for the Miter, Sarmiento and San Martín lines and the Tren de la Costa.

The mechanism for updating the rate charts started in March of this year, after the value of the ticket remained frozen for more than two years.

Prepaid medicine is another service that has a monthly update mechanism. In this case, the quotas rise according to the variation of the health cost index -which measures the expenses in human resources, medicines and inputs- and which is applied to all users, except for those with income below six minimum wages ($406,458 in February, rises to $482,052 in April). In that case, you can request a cap on the increases that corresponds to 90% of the salary variation after completing an affidavit of income online.

In April, the rise will be 2.36% for all users according to the health cost index. For the first time since the increase mechanism was applied, 90% of the salary variation -which was 4.87%- was above the general increase index.

From the Superintendence of Health Services they counted infobae that the affidavit of income to obtain minor increases must be completed every month.

Starting this year, after an agreement with the Government to which 18 provinces adhered, an increase scheme was defined for private schools that have a state subsidy. After a 16.38% increase applied in March, during April the quotas will have an adjustment of 3.35%. This increase will be repeated monthly until June.

AMBA electric power users will have an increase in rates in April, to which one more will be added later from June. According to the Secretary of Energy, Flavia Royon the increase will not exceed $400 for most households with average consumption of 300 kWh per month.

A report by the consultancy Economía & Energía highlights that, with the increases scheduled for next April, the rates for residential users of Level 1 (high income) will increase on average by 136% compared to the average value paid during all of 2022. For users of the Level 2 (low income), the difference calculated in the same way will be 44%. And for Tier 3 (middle income) users, it will be 86 percent.

The Government continues with the campaign to increase the number of users who sign up in the registry RASE to apply for subsidies to energy. Users who can request to maintain the subsidy are those with income between 1 and 3.5 basic baskets, equivalent to $163,539 and 572,386.50 pesos.

In addition, in May it is expected that all users in the higher income segment will stop receiving subsidies for the cost of electricity, which will represent a new increase for Tier 1 households.

The contracts signed by the Rental Law have a duration of three years, with updates every 12 months, according to the Rental Contract Index (ICL), which contemplates the evolution of inflation and wages in equal parts. Thus, tenants who are one year old since their last update will have an increase of 92.5%. For example, someone who currently pays $60,000 per month who turns one in April will pay 115,555 pesos.

According to data from advertisements published on the Zonaprop platform, the average rental value of a studio apartment in the Autonomous City of Buenos Aires is $88,110 per month, in the case of a two-room apartment it reaches $107,835 per month and a three-room unit environments amounts to $144,639 per month.

In March, the price agreement between the Ministry of Energy and the oil companies expired, which contemplated a path of increases in the price of fuels of 4% average in December, January and February and 3.8% in last March. There are still no official definitions on a possible renewal of the agreement or on the next adjustments.

A key issue is that the postponement of the application of taxes on liquid fuels expires on April 1, which is updated quarterly for inflation. Since 2020, there have been several suspensions and the updates corresponding to the last quarters of 2021 and the first, second and third quarters of 2022 have not yet been applied.

How much could prices at the pump rise if you decide not to defer taxes any longer? According to a calculation made by the consulting firm Energy Consilium between ICL and IDC, it could increase $37 per liter in the case of gasoline and $23 per liter in the case of diesel. The percentage will depend on the type of fuel (premium or normal) and the part of the country. For its part, the consultancy firm Economía & Energía estimated that the application of the tax implies a 12% increase in gasoline and 8% in diesel.

In the months of the agreement, the price of super gasoline in the city of Buenos Aires went from $145.10 a liter in November to $150.90 in December, $156.80 in January, $163.10 in February and $169.30. with the last magnification applied. It is a rise of 16.7% between November and March.

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