The national government will apply From January 1, 2026 A new plan to support electricity and natural gas It will mean increases in final rates and a significant reduction in current subsidies. The reform removes segmentation by income levels (N1, N2 and N3) and replaces it with a targeted subsidy system comprising only two categories: users who will receive partial support and non-subsidy users, who will pay the full rate. This change will leave about 140,000 middle-income households, which, until now, were receiving 100% subsidy on consumption up to 250 kWh per month, without the full bonus, and will receive only 50% coverage for the same volume of energy.
The effect of the new system will not reach any time of the year. The subsidy reduction and rate increase are scheduled to take effect in mid-summer, one of the periods when energy demand increases. Mainly in the NEA region. In addition, as officially announced, the volume of subsidized energy will be less than the current volume, and thus a larger portion of consumption will be charged at full price.
Formosa made a decision in the opposite direction: Since the beginning of Javier Miley’s administration, electricity prices have accumulated increases of more than 270%.. In the face of this, the province decided to maintain the regional support “Efuerzo Formoseño”, a key tool that allows to mitigate the impact of the amendment on resident users. This scheme is currently benefiting To about 90% of Formosa homes Framed in two parts, N2 and N3, it absorbs a large portion of the added value of distribution that makes up the bill. Thanks to this policy, Formosa has been able to place itself among the provinces with the lowest electricity rates in the country, as revealed by the recent report of the Prices and Subsidies Observatory of the Interdisciplinary Institute of Political Economy (IIEP) of UBA-CONICET.
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Continuity of support for #Esfuerzo Formoseño becomes even more important in a context where energy policy, at the national level, aims to transfer the true cost of energy to end users. The new national plan stipulates that the subsidy will only cover 50% of consumption within a limited block of 300 kilowatt-hours per month in summer and winter, and 150 kilowatt-hours in spring and fall.while any increase will be charged at the full price. This will lead to a significant increase in spending on basic services for thousands of households, especially those in the Near East region, which depend on electricity and should face higher consumption in the summer.
So far, the subsidy has covered 100% of monthly consumption of up to 350 kWh for low-income families and up to 250 kWh for middle-income families.
This generates what various analysts describe as a “price distortion”: during the summer, households can pay for electricity at a higher price than some companies and industries, a scenario that deepens the burden on residential consumption. The gradual removal of the national state from the subsidy system leaves millions of users vulnerable to the fluctuations of the energy market, in an economic context where income does not keep pace with the pace of increases.
As the national government advances in achieving its goal of reducing spending on energy subsidies as part of the fiscal system, the provinces face the challenge of determining whether to mitigate this impact with their own resources. In the case of Formosa, the decision was clear: to maintain an energy policy aimed at ensuring access to service as a basic right, even under a scenario of strong pressures on public finances.