Alarming Increase in Industrial Gas Tariff
The industrial gas sector in Rio Grande do Sul faces an alarming proposal for a tariff increase. The Gas Company of the State of Rio Grande do Sul (Sulgás) proposes a substantial 63.4% increase for the piped gas distribution service in 2023. If approved, the industrial gas tariff in the state will become the third highest in Brazil starting in the second half of this year.
Public Hearing and Repercussions of the Increase
On May 17, at 9 a.m., the State Agency for the Regulation of Public Services Delegated of Rio Grande do Sul (AGERGS) will hold a public hearing to discuss the proposed adjustment. Adrianno Lorenzon, director of Natural Gas at Abrace Energia, expressed concern about the impact of the increase on competitiveness and gas distribution activities in the state.
Adjustment Proposal and Fiscal Impact
Abrace suggests a more modest adjustment of R$ 0.3578/m³, in contrast to Sulgás’s proposal of R$ 0.6137/m³. According to Lorenzon, Sulgás’s proposal includes a sharp increase due to the value of taxes related to results, which, if excluded from the calculation, would immediately reduce the capital cost by 69%.
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The Role of Taxes and the Efficiency Issue
The taxes related to results total R$ 138,060,436.00 and, if disregarded, the capital cost would fall to R$ 61,619,470.00. Lorenzon argues that these taxes should only apply to the activities necessary for providing the service and should not be reimbursed through tariff revenue.
Approach to Distributed Volume and Consumer Overcost
Another concern raised is Sulgás’s proposal to consider only 80% of the volume of gas to be distributed. Abrace argues that 100% of the volume should be considered to avoid extraordinary gains for the concessionaire and to encourage efficiency in distribution.
Future Investments and Fiscal Transparency
A final point of controversy is the incorporation of future investments into the capital cost composition of the concessionaire. Abrace considers this abusive, as it encourages investment inefficiency. The association calls for greater transparency in monitoring the concessionaire’s asset base, operating costs, and investment efficiency.

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