The Honorable Chamber of Deputies gave preliminary approval to a bill that reorganizes four central aspects of the Argentine energy system: the subsidy regime for gas in cold areas, the accumulated debt in the wholesale electricity market, incentives for the hydrocarbon sector, and the tax exemption aimed at renewable energies.
The proposal seeks to bring tariffs closer to real costs and to return the Cold Zone Regime to a more precise scheme: automatic continuity in areas historically recognized for extreme cold and targeting based on socioeconomic vulnerability in the rest of the territory. At the same time, it aims to regularize the debt with Cammesa, eliminate hydrocarbon incentives that have lost relevance in the current context, and extend tax benefits for renewables until 2045.
A basic rule of economics indicates that when a subsidy becomes universal, it ceases to fulfill a social function and ends up becoming a fiscal privilege that is difficult to sustain. The expansion of the Cold Zone Regime in 2021 is a clear example: it ended up subsidizing heating consumption for high-income households in temperate zones and deepened a fiscal deficit that is ultimately financed by all Argentines. The comprehensive reorganization project of the energy system raises an uncomfortable but essential issue.
By proposing tariffs linked to real costs and redesigning the Cold Zone with a dual criterion—strict geography for the south and socioeconomic vulnerability for the rest—the law aims for the State to spend less and allocate resources better. The new regulation maintains the subsidy in historically cold areas, such as Patagonia, Malargüe, and the Puna, and applies a more stringent vulnerability filter in other regions of the country.
Together with the cleaning up of the debts of distributors with Cammesa and clearer signals for investment and renewable energies, the regulatory text aims to resolve a deficiency that the energy sector has been dragging for years: clear rules, predictability until 2045, and stable criteria for the allocation of subsidies.
The Executive Power sent a bill to Congress to modify the current subsidy and energy regulation scheme, organized around four axes: the readjustment of the subsidy regime for gas consumption in cold areas, the regularization of the historical debt of the Wholesale Electricity Market, the extension of the tax exemption for renewable energies, and the repeal of two incentive regimes for the hydrocarbon sector.
The four points respond to the same logic: to replace tools designed for emergency situations with rules capable of functioning under normal conditions.
First axis: subsidy for gas consumption and Cold Zone
Currently, around 4.3 million gas users in the country receive some type of subsidy on their consumption. Of that total, about 900,000 households belong to the area historically considered to be of extreme cold: the Patagonian Region, the Malargüe department in Mendoza, and the Puna region. There, the benefit is granted automatically, regardless of income level.
The more than 3 million remaining users were incorporated in 2021 through Law 27.637, which expanded coverage to regions with less severe climatic conditions. In those areas, the subsidy currently reaches households that prove incomes below three Total Basic Baskets for a typical family, through the registration of the Focused Energy Subsidy, among other requirements.
The regime has its origins in the period when Gas del Estado provided the distribution service. At that time, the State set differential tariffs for the coldest regions of the country and financed them directly with Treasury resources. After the privatization of the service in the 1990s, and with the State out of the role of provider, that mechanism became outdated.
In 2002, under the Public Emergency Law, the pesification and the tariff freeze, Article 75 of Law 25.565 created the Trust Fund for Residential Gas Consumption Subsidies, known as the Patagonian Fund. This scheme replaced direct Treasury financing with a surcharge on the price of gas paid by all users in the country, regardless of geographical location or income level. At that time, the subsidy still had a concrete climatic and territorial justification.
In 2021, Law 27.637, enacted during Alberto Fernández's presidency, extended the benefit to regions that did not have climatic conditions equivalent to those of the original core zone. What until then was a regime limited to Patagonia, Malargüe, and the Puna automatically expanded to include sub-environmental zones defined by the IRAM 11603 standard and adopted by Enargas as a zoning criterion: subzones IIIa, IVa, IVb, IVc, IVd, V, and VI. The new map incorporated sectors of southern Buenos Aires, areas in the center of the country, and other regions that, while colder than the northern areas excluded from the benefit, do not face the extreme conditions that justified the original regime.
In addition to setting a 50% discount for the core zone, the law established a general discount of 30% for all users in the incorporated regions automatically, and 50% for those qualifying as vulnerable according to the income criteria set forth in the regulation. Thus, the universe of beneficiary households increased from just over 800,000 to more than 4 million, including high-income users without socioeconomic filtering, with automatic access based on geographical location and no obligation to register in any registry.
Decree 943/2025 created in January 2026 the Focused Energy Subsidies regime, which unified subsidies for electricity, natural gas, undiluted propane gas through networks, and liquefied petroleum gas under a single criterion. Households whose combined net income is less than three Total Basic Baskets for a typical household 2 according to Indec, as well as those with at least one member with a Housing Certificate from ReNaBaP, Lifetime Pension for Veterans of the South Atlantic War, or Unique Disability Certificate, qualify for the benefit. The SEF replaced the previous segmentation into three levels—N1, N2, and N3—with a simpler, more verifiable binary scheme.
