Business 02/05/2022

Gas price cap to lower electricity bill postponed one week

The Spanish government acknowledges that it cannot yet approve measures at Tuesday's Cabinet meeting

2 min
The Minister of Ecological Transition, Teresa Ribera, this Monday at the Congress of Deputies.

BrusselsThe reduction in the electricity bill will have to wait. The third vice-president and minister for Ecological Transition, Teresa Ribera, admitted this Monday that the government still cannot approve the regulation that should allow a limit on the price of gas because it has not yet obtained the definitive green light from Brussels. Last Tuesday Ribera and her Portuguese counterpart, José Duarte Cordeiro, met the Commissioner for Competition, Margrethe Vestager, and announced they had been given the green light by the Commission to set a limit on gas prices of around €50/MWh, pending only a few technical details. But the final agreement has not yet been reached and, therefore, Pedro Sánchez's government will not be able to approve the measure at this Tuesday's cabinet meeting as Ribera had announced.

Speaking on her way to an official meeting of EU energy ministers convened to discuss the response to Russia cutting off gas supplies to Poland and Bulgaria, Ribera said "it is not easy for us to finish it in time to approve it tomorrow. We are polishing the details of the final proposal, the sooner it is ready the better". The vice-president now expects the measures to be approved next week. The Spanish government had pledged to ensure that consumers would start to notice the reduction in their electricity bills in May, but negotiations with the European Commission are more complicated than they seemed after Sánchez's announcement of the "Iberian exception" at the end of March, promising an imminent reduction in energy prices.

As announced by Ribera and Duarte Cordeiro last week, Lisbon and Madrid have managed to get the European Commission to allow them to set a limit for the price of gas of around €50/MWh for a year. This would have an impact on consumers' electricity bill, which is now at historic highs, especially since the Russian invasion of Ukraine began. In addition, Brussels is also committed to speeding up Spain's interconnections with the rest of the European continent, which inevitably involves France. Even so, the EU executive is very concerned about the impact that such a measure could have on the single European energy market, which is why talks are proving to be particularly complicated. In addition, energy companies are also opposed to the measure.

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