The latest policy document on energy storage subsidies in Argentina

Why are energy subsidies important in Argentina?

Energy subsidies played a critical role in protecting poor households from rising in ation in Argentina in the wake of the 2001-02 crisis. An emergency arrangement was intro-duced to freeze residential gas and electricity tari while maintaining the provision of public services, and thus protecting the real purchasing power of the poor.

How can public money help the energy sector in Argentina?

A considerably larger amount of public money committed to supporting the economy and people of Argentina through monetary and fiscal policies in response to the crisis may also benefit different elements of the energy sector.

How much money has Argentina committed to supporting different energy types?

In 2020-2021, in response to the COVID 19 pandemic, Argentina has committed at least USD 1.44 billion to supporting different energy types through new or amended policies, according to official government sources and other publicly available information. These public money commitments include:

Does the distributive incidence of energy subsidies change in Argentina?

The distributive incidence of subsidies does not appear to have changed substantially. Energy subsidies in Argentina (lower in aggregate terms) continue to be, although progressive, pro-rich.

How did energy subsidies affect sustainability and ciency?

During this period, energy subsidies had detrimental e ects on sectoral sustainability and e ciency. The discretional management of energy prices resulted in distorted signals that led to overconsumption and underinvestment in the sector.

How did energy subsidies affect public expenditure?

However, even after the crisis was over, the cost of these subsidies quickly increased due to a rise in international energy prices and the increasing demand of subsidized goods in the context of a fast-growing economy. Thus, energy subsidies were a key driver behind the growth of public expenditure.