The Government continues to advance in the payment to the gas producers and bought back bonds from the Central Bank for US$11 million to compensate these companies for their participation in the Gas Plan. This is the AE38 bond, which represented a 60% reduction of the debt that the State had with the companies in 2022.
According to Joint Resolution 49/2024 published by the Ministry of Economy together with the Secretariat of Finance and Treasurythe purchase of 2028 step-up bonds (AE38 USD Bond) – currently trading at US$45 – was arranged at market price, for a value in dollars of US$11,195,487 at a price in pesos of $58,220 for each original nominal value of one hundred US dollars (VNO USD 100), which implies an effective value of $6,518,012,531.40 to be paid to the BCRA with a settlement date of August 20, 2024.
The titles received from the operation will be kept in the portfolio of the Treasury Department dependent on the Ministry of Economy to be delivered at the same time to the companies that adhered to the Gas.Ar Plan program, the writing establishes.
AE38 Bonus: Which companies will be paid and why?
The measure aims to cancel the payments owed to YPF, TotalEnergies, Pan American Energy, Tecpetrol and Pampa Energíaamong other companies, for the gas they sell to distributors through the Gas Plan. The natural gas production subsidy program was created in 2020 and in 2022 it was extended until 2028, with the aim of supplying the domestic market, but the government sharply reduced transfers.
According to the resolution of the Economy, the Government recognizes the successful producer as “compensation”, the resulting differential between the price billed to the Natural Gas Distribution Licensees and/or Subdistributors and the Price Offered by the awarded producerwith a seasonal adjustment factor.
A scheme is also planned Provisional Payments -equivalent to eighty-five percent (85%) of the compensation for each monthly period-, and subsequent adjustments based on the amounts actually injected.
Gas Plan subsidies in August
Energy subsidies represent 79% of total subsidies and increased 129% y-o-y in nominal terms while decreasing 40% y-o-y in real terms in the first seven months of the year. CAMMESA’s accrual was very low in June due to the lack of available credit to execute (only $42.344 million was accrued) although it returned to values close to the average in the month of July. This is reported in a study called “Tariffs and Subsidies” conducted by UBA-Conicet.
Transfers accrued by Energía Argentina SA (ENARSA) accumulated in seven months increased 93% YoY nominal (-50% YoY real) and those destined to the Gas.Ar Plan, for incentives for the production of natural gas, increased 117% YoY (-48% in real terms).
Source: Ambito
