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Argentina's natural gas regulating body Enargas approved rate increases for 11 natural gas transportation and distribution firms.
The measure – communicated through 11 resolutions, one for each company concerned, that were published in the official gazette – is effective as of April 1 and follows an approved increase in natural gas rates for end-users.
Both actions are part of a plan by newly elected President Mauricio Macri's mining and energy ministry to reduce subsidies and price distortions in the energy sector, in order to attract needed investment in the oil and gas and electric power segments.
The new pricing structure will allow the average wellhead price for gas produced in Neuquén province - home to more than half of Argentina's gas output - to increase to US$5.10/MMBtu from US$2.10/MMBtu, provincial governor Omar Gutiérrez said in a separate statement.
The 11 firms must each present a detailed timeline within 10 days of the resolution taking effect for their 2016 obligatory investment plans, which were already approved by Enargas.
The companies and their corresponding investment plans are TGN, which will invest 1.041bn pesos or US$70.4mn, TGS (794mn pesos), Metrogas (715mn pesos), Gas Natural Ban (357mn pesos), Camuzzi Gas Pampeana (302mn pesos), Gasnor (171mn pesos), Gas del Centro (149mn pesos), Camuzzi Gas del Sur (128mn pesos), Gas Cuyana (117mn pesos), Litoral Gas (114mn pesos) and Gasnea (5mn pesos).
The conditional rate increase is the third authorized for TGN since July 1999, the firm said in a securities filing, citing that it has reported an operating loss for each of the last five years.
Subsidy reform in the gas segment means that upstream producers "will now collect more money from consumers, and less from the government, which improves the sustainability of the industry," according to a Raymond James research note.
The government also approved a tariff adjustment for power generators, which will translate to an average rate increase of 45% for electricity classified as "old energy," Raymond James said.
The measure will apply to 80% of installed capacity owned by generator Pampa Energía.