Electricity co-operatives across Argentina are refusing to accept the recent government-imposed 55% increase in wholesale energy values which, they say, puts their businesses at risk.
They have warned that the increases will not only hit the end users, but also the distribution companies that buy energy from wholesaler CAMMESA.
Carlos Ciapponi, president of Cooperativa Eléctrica neuquina CALF – the country’s largest energy distribution co-op – criticised the increase and the decision to eliminate subsidies from the electricity distribution sector. He also said he will not pay CAMMESA the wholesale increase because “we are not in a position to pass that adjustment onto the end user”.
Mr Ciapponi said he will raise the issue at the next meeting of the Federation of Electric Co-operatives of Argentina, which brings together more than 240 distributors and serves more than 4 million households. He also said he will not rule out a “rebellion” by the co-operatives against the removal of the social tariff from the electricity distribution sector.
“There are many users who already pay 8,000-10,000 pesos (£170-£210) per month for their electricity consumption, and with the government’s additional 55% increase, it’s going to be difficult for them to pay their bills,” he said.
He also explained that the cost of energy historically represented just over 30% of his co-operative’s budget, but now it is close to 70%, with taxes in addition to this. And he appealed for the government to change the electricity VAT levy.
“The supply of electricity is considered an essential service and the Treasury must set a differential VAT rate,” added Mr Ciapponi. “For example, 10.5% VAT is levied on bread and milk.
“However, electricity consumers pay 21% and small to medium enterprises pay 27%. VAT should be applied as an essential service, and businesses should not have to pay up to 27%.”
