The Spanish government will take measures on Friday to contain electricity prices

MadridThe Spanish government is preparing a contingency plan for this Friday, when the Council of Ministers will meet in an extraordinary session, to address the consequences of the Iran-Contra affair. However, this Tuesday, the Minister of Economy, Carlos Cuerpo, and the Minister for Ecological Transition, Sara Aagesen, announced several measures: containing electricity prices, mitigating the rise in fuel and fertilizer costs for the most vulnerable sectors, and establishing a social safety net to protect the most vulnerable. Despite this, sources within the Spanish government downplay the possibility of including a suspension of evictions or the automatic extension of rental contracts, as demanded by the Sumar coalition. Their priority, in fact, is to have the decree law ratified by Congress this Thursday: any inclusion of housing measures would likely provoke a clash between the partners in the multinational majority, preventing its approval.

"These will be structural and short-term measures," specified Spanish government spokesperson Elma Saiz, adding that Spanish President Pedro Sánchez himself will explain them on Friday after the extraordinary cabinet meeting. She asserted that they will be "flexible" so they can be adapted to the evolving situation in Iran, since one of the key elements to determine is the duration of the decisions to be made.

In parallel, to try to curb rising fuel prices, the Spanish government also announced that 11.5 million barrels of oil will be released from Spanish reserves in coordination with the International Energy Agency. The idea is to inject 400 million barrels of oil into the market over 90 days to ease current tensions. This corresponds to 12.5 days of national consumption, the minister said, given that Spain has reserves for a total of 92 days. The release, however, will not be carried out by the Strategic Petroleum Reserves Corporation (CORES), a public entity that holds half of Spain's reserves, but will instead come from those held by oil operators and distributors, Europa Press reports. This afternoon, the Minister for Ecological Transition is meeting with representatives of the sector. "It's the quickest way to get the fuel to the end consumer," Aagesen explained. Minister Cuerpo has warned that the decisions to be made are "localized" and not generalized, as in the case of Ukraine, where a 20-cent subsidy on fuel prices didn't significantly impact consumers. In fact, Cuerpo presented a report to the Council of Ministers showing that the price increase was worse in 2022 following the Russian invasion. In this way, the government justified the targeted approach of the measures, focusing on the agri-food sector, as it is currently the most affected by the rising prices of fuel and fertilizers. The Spanish government acknowledged that this could directly impact the cost of the average shopping basket.

In any case, for Aagesen, beyond the short-term measures, it is essential that the emergency plan to be approved on Friday also include structural reforms such as "the electrification of the economy" and the strengthening of wind energy: "The sun, the rain, and the wind will never be blocked in the Strait of Hormuz," the minister stated. The measures, therefore, will also involve decarbonization and a commitment to renewables, but Sánchez is reserving all the details for Friday.