From January 1, 2026, a new energy subsidy system will come into force, which will significantly change the way the state supports households to pay for electricity and gas. The modelcalled Targeted Energy Subsidies (SEF), rIt will replace the current fare segmentation by tiers (N1, N2 and N3). And This will combine aid for electricity, natural gas via networks and bottled gas into a single scheme.
By completing the public consultation, the government has taken an important step towards eliminating energy subsidies
The reform is part of the official strategy of tax regulation and correction of relative prices with the aim of reducing the share of subsidies in public finances and moving towards tariffs more closely aligned with the real costs of production and distribution.
Fewer categories and more selectivity
He The new system eliminates the three-tier system and replaces it with a simpler division into subsidized households and unsubsidized households. He Access to benefits is primarily determined by family income. with a The threshold is three Total Basic Baskets, in addition to patrimonial criteria that act as an exclusion factor.
In this way, households that exceed this income limit or register high-value assets will be excluded from the scheme and start paying the full energy price. The aim of this targeting is to concentrate resources on lower-income sectors and reduce coverage to middle and upper-middle segments that previously received some level of subsidies.
The new system also integrates existing programs such as the bottle subsidy under uniform rules, with stricter controls and a unified register of beneficiaries.
This is how electricity and gas subsidies work
In the electricity sector, households that are entitled to subsidies receive coverage of 50% of their energy costs up to a certain consumption limit. This limit will be wider in the months of greatest demand – summer and winter – and narrower in the temperate months. Any consumption exceeding these limits will be paid for without government support.
For natural gas via networks, the regulation will depend on the season. The 50% subsidy is only granted in the months with the highest consumption, between April and September. During the summer, when demand is lower, subsidized users pay full price for the service.
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For those using bottled gas, the benefit remains integrated into the new system, with direct rebates defined according to the same income and equity criteria that apply to the rest of energy services.
A year of transition
The government expects 2026 to act as a transition year. An additional bonus will be introduced in January, temporarily increasing the level of subsidies for both electricity and gas, and then gradually reducing them throughout the year.
The official idea is that the system will be fully consolidated towards the end of 2026, with the government contribution significantly lower than the current one and a larger share of the costs being passed on to end users.
Fiscal and political implications
From a fiscal perspective, the redesign suggests a structural reduction in spending on energy subsidies, one of the most relevant components of primary spending in recent years. In political and social terms, the change anticipates a scenario of greater pressure on the bills of households losing social benefits, in a context where the government aims to maintain adjustment with a more limited and targeted support network.
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The new system therefore represents a turning point in the energy policy promoted and pursued by the Javier Mileis government less general subsidies, greater selectivity and a path towards convergence towards more realistic rates, with a direct impact on users’ wallets and on the balance of public accounts.
The keys to the new energy subsidy system 2026
• End of segmentation by levels. The current N1, N2 and N3 disappear. The system is simply divided into two groups: households with a subsidy and households without a subsidy.
• Targeting by income and assets. Access to the benefit is defined by family income (up to approximately three Total Basic Baskets) and by ownership criteria that exclude high-net-worth households.
• Partial funding with consumption limitation. In the electricity sector, the state only covers up to 50% of the costs within defined consumption blocks. The surplus will be paid out in full.
• Gas with seasonal control. The subsidy is only granted in the months with the highest demand (April to September). In summer, self-funded households pay the full price.
• Integration of existing programs. The new regulation standardizes subsidies for electricity, mains gas and cylinders and replaces previous regulations such as the Home program.
• Transition year. There will be temporary premiums in 2026, with a higher subsidy at the beginning of the year and a gradual reduction until their abolition.
• Tax objective. The aim of the reform is to structurally reduce expenditure on energy subsidies and to align tariffs more closely with the actual costs of the system.
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