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    The Government will approve today the limit on gas prices to lower electricity prices for 12 months.


    May 13, 2022 - CE Noticias Financieras

     

      The Government will approve this Friday in an extraordinary Council of Ministers the limit on the reference price of gas to lower the electricity bill for the next 12 months. "We are going to hold an extraordinary Council of Ministers to approve the cap on the price of gas used to produce electricity, thus reducing the bill for families, companies and industries," Spanish President Pedro Sánchez assured Thursday at a forum.

      Sánchez spoke of an initial ceiling of 40 euros/MWh, compared to the 72 euros that the market marked this Wednesday or the almost 80 that the average price has marked in the last quarter. Afterwards, this figure will grow to an average of 48.8 euros in the twelve months of application, very close to the 50 that appeared in the first agreement reached between Spain, Portugal and the European Commission. In the absence of the fine print, the calculations of several experts suggest that the mechanism will make it possible to reduce the bill by close to 40% compared to March for consumers on a regulated tariff.

      "It will provide important protection and a factor of predictability and peace of mind in the face of future rises in international energy prices in a geopolitical scenario of enormous volatility and uncertainty," the president stressed. In parallel, the mechanism will also be approved this Friday by the Portuguese government in another extraordinary Council of Ministers, in a further demonstration of the "close collaboration and coordination" between the two countries.

      Spain and Portugal sent their joint proposal to the European Commission at the end of last week, after arduous weeks of technical negotiations. This agreement, aligned with the decision of the European Council of March 24 and 25, compatible with the treaty and regulations, will thus allow the implementation of a temporary mechanism, the so-called 'Iberian derogation', and provide coverage until the end of next winter.

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