Simultaneously, the 2026 energy budget reveals a 4.2% cut, reducing allocations by US$205 million despite record oil and gas output. Total funding drops from US$7.2 billion in 2024 to US$4.7 billion in 2026, with notable reductions for CAMMESA’s electricity market operations (-21%) and smaller increases for Plan Gas.Ar (+10.7%). Energy subsidies fall 5.6%, with a tightened benefit scope limited to select cold zones such as Patagonia and Malargüe, increasing residential cost shares by over 10 percentage points. This fiscal adjustment raises concerns over the state’s diminishing investment role while production surges, particularly due to shale developments in Vaca Muerta.
The government also enacted structural reforms to the Liquefied Petroleum Gas (LPG) market through Decree 446/2025, removing prior authorization requirements for plant expansions, facilitating imports and exports without permits, and encouraging container standardization to improve efficiency. This deregulation signifies a shift to limit state control and encourage competition.
A revision of gas transportation contracts via Resolution 66/2026 addresses inefficiencies stemming from declining production in traditional basins by realigning capacity with current output concentrated in the Neuquina basin. It eliminates unusable routes, reallocates firm transport contracts, and aims to reduce costs and distortions impacting industry and distribution. These changes will proceed with regulatory consultation and new tariff structures.
Finally, the government is accelerating the phase-out of the Plan Gas.Ar subsidies to promote market-based contracts, echoing 1990s liberalization trends but raising questions about future sector stability amid inflationary and geopolitical uncertainties affecting global energy prices.
This article was curated and published as part of our South American energy market coverage.
