Spain to cap gas prices, redirect company profits to curb energy bills, PM says (updated)
13/09/2021 21:37
(Adds details, quote, background)
By Nathan Allen and Belén Carreño
MADRID, Sept 13 (Reuters) - Spain will cap gas prices, cut
taxes and redirect energy company profits as part of a package
to bring down soaring electricity prices, Prime Minister Pedro
Sanchez said in an interview on Monday.
Sanchez told state broadcaster TVE it was unacceptable that
energy companies were profiting from elevated market prices for
electricity.
"We are going to take away those extraordinary profits that
the energy companies are making...and we are going to pass them
on to consumers," he said, adding that the special electricity
tax would drop to 0.5% from 5.1%.
Sanchez said redirected profits from the utilities would be
used to cap gas prices and bring down energy costs for
consumers. He did not give any further details on how this would
work.
His left-wing coalition had been under pressure from the
opposition and civil society organisations to reduce electricity
bills.
The cabinet is set to approve the package at its weekly
meeting on Tuesday. It will also include an extension of a
reduced VAT rate and the suspension of a 7% generation tax until
the end of the year.
The measures will reduce government revenues in 2021 by
around 1.4 billion euros ($1.65 billion), he said.
"The common good comes above the profit-and-loss accounts of
big business," Labour Minister Yolanda Diaz tweeted during the
TVE interview.
Elevated demand for natural gas and rising prices for
tradable emissions permits CFI2Zc1 have sent power prices
surging in many countries, including Spain.
Spot electricity prices, which make up around a third of
consumer power bills, have broken records for weeks, reaching an
all-time high of 154.16 euros per megawatt-hour on Monday,
according to market operator OMIE.
Betting that cheap clean energy will keep down prices in the
long term, Spain plans to auction 3,300 megawatts of renewable
capacity in October, with nearly a fifth earmarked to come
online within a year. urn:newsml:reuters.com:*:nL8N2QA49I
($1 = 0.8471 euros)
(Reporting by Nathan Allen and Belén Carreño; Editing by Leslie
Adler and Sonya Hepinstall)
((n.allen@thomsonreuters.com; +34 617 792 131;))