Experts attributed the high gas prices to low gas reserves in Europe’s underground reservoirs, limited supply from major suppliers and high demand for liquefied natural gas in Asia. Several European politicians accused the Russian gas company Gazprom of cutting their supplies and forcing them to authorize the Nord Stream 2 gas pipeline.
The crisis puts Europe’s fuel supply at greater risk. The continent relies on Russia for more than a third of its gas supplies, and around a third of those flows are sent through Ukraine. Low inventories of the fuel last year sent prices to record levels, and volumes from Russia have shrunk since the second half of 2021.
“In the case of extreme risk, which we would define as one that has a material and lasting negative impact on global growth, the conflict could escalate to a level that pushes Western nations to accept a disruption of the flow of Energy from Russia”, said analysts at UBS Group AG while warning of the impact it will have on rates.
How does it affect Argentina?
Russia is the largest supplier of oil and gas in Europe, so a cut in supply as a result of military actions in Ukraine could have more than serious effects for the Old Continent, with repercussions on the rest of the globe. Its impact on prices is transferred to its derivatives in the world, but also to food raw materials that use fuel as an input.
In this scenario, high international prices may imply the final jump in LNG bills. Recently, Alberto Calsianohead of the Department of Energy of the Argentine Industrial Union (UIA), He assured that the 20% average increase in electricity and gas rates “does not move the ammeter” of what the production, transportation and distribution companies claim.
In an interview with AmbitCalsiano assured that “the price of gas has a direct impact on the price of electricity. The price of the electron in the wholesale market has an important component of gas. Today 64% of electricity is generated by thermal power plants, which should work with natural gas, but today the conventional fields are declining production, Bolivia is stopping sending gas to Argentina and what remains is unconventional gas, mainly with the Loma La Lata field in Vaca Muerta, but there what you don’t have transportation capacity. That’s the bear’s trap: how are we going to deliver gas to thermal power plants? The only way will be to import.”
In this framework, the national government unfroze gas rates after almost three years and authorized an average increase of 17% starting next March. as far as he could tell Ambitresidential users will have an increase of between 19% and 20%, as the Secretary of Energy had anticipated, Dario Martinezwhile for SMEs it will be between 14% and 15% in the final rate.
The measure was made official this Wednesday with the publication of Decree 91/2022 in the Official Gazette, which establishes adjustments for gas production and distribution companies between 36% and 70%, depending on the user. At the public hearing, the companies had requested increases in the final rates of between 76% and 80% on average.
At the same time there will be many users who will pay less than last year, even with the average increase of 20%. “It is very important to highlight that, thanks to the Law for the Extension of the Cold Zone Regime, approved last year, 35% of residential users (3.1 million users or more than 10 million people) will register this year a 28% discount on the 2022 invoice. You will receive this discount even on this 20% update”, they affirmed from the Enargas.
Source: Ambito
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