The Government is currently facing a difficult decision regarding energy subsidies, rate freezes, and tax policies. In order to provide households with cheaper energy without raising rates, the Government has decided to allocate subsidies to imported gas. However, this decision is expected to have an impact on public accounts and may require further decisions on rate freezes in the coming months.
The Basic Energy Basket, aimed at reformulating the subsidy system for more efficient consumption, is still being developed and may take several more months. The postponement of rate increases has led to a build-up of “repressed inflation” in various sectors, including transportation, electricity, and fuel taxes. Despite the budget adjustments and the suspension of rate increases, energy subsidies are expected to decrease over the coming years.
In addition to energy subsidies, the Government is also considering raising water rates and increasing the fuel tax as alternative revenue sources. These decisions are dependent on various factors such as potential spending cuts or alternative revenue sources, inflation rates, and public support for the President.
Overall, balancing these factors will be crucial in the coming months to ensure economic stability and public support for government policies.
