"We saw in the case of the July increase that this increase was limited, because at the same time it was combined with price drops in other products, particularly gasoline, the effect of a lower value of the dollar," said Chilean Finance Minister Mario Marcel.
The unfreezing of electricity rates in Chile continues, after the National Energy Commission (CNE) confirmed that bills will rise by 23% starting Tuesday, October 1, the third time since the 7% adjustments in June and 12% in July.
These increases come after rates were frozen since 2019, which led to the accumulation of a considerable debt of more than US$ 6 billion for the electricity sector.
In this context, the Minister of Finance, Mario Marcel, commented on the matter and recalled that the electricity subsidy is already being paid, an amount that comes to lessen the impact that the unfreezing of rates has on the pockets of families.
And with that, he also put a damper on the possible impact that this new increase would have on the Consumer Price Index (CPI), that is, on inflation.
“Since the accumulated amount of this subsidy for several months is being paid as a discount on the bill, today we have a significant number of families who will have a bill of $0 this month. That is, the accumulated subsidy will compensate for everything they will have to pay this month,” said the minister.
Marcel reminded that a new stage for applying for the electricity subsidy will open from October 7th, and this step will be necessary only for those who did not apply before, or those who changed their address.
Regarding the impact of this new rate increase on inflation, the head of finance said that "we saw in the case of the July increase that this increase was limited, because at the same time it was combined with price drops in other products, particularly gasoline, the effect of a lower value of the dollar."
On this occasion, the minister assured that this effect will be accentuated in the coming months, thanks to the fact that “gas prices will continue to fall” for at least “two or three additional periods.”
Added to this is the dollar, which in recent days has been trading around $900, and in the case of this Monday is below this barrier.
Changes in gasoline and diesel prices are reported every three weeks. The last Enap price estimate report was on Wednesday, September 25, so the next price change will be reported on October 16.
For all these reasons, Minister Mario Marcel pointed out that “there are opposing effects. Obviously, given that the increase in tariffs is considerable, it will probably dominate (and at the same time) be mitigated by these reductions. The important thing is that these increases do not drag down the rest of the prices in the economy.”
