HE State Shock protection measures caused by price increases raise the shield. energy crisis and exacerbated by the Russian military occupation of Ukraine. For two years, they have been putting together, redefining and expanding their anti-crisis plans to deal with rising electricity, natural gas and fuel prices. And now the Executive is preparing to put put an end to most of the major measures still in effect for next year.
The government has told the European Commission that the current state of energy prices, which is far from the historic highs reached in the first half of last year, It is possible that all or most of the extraordinary measures can be withdrawn between this year and next year. It was adopted for the protection of homes and businesses against the rise in electricity and gas.
” falling energy prices and inflation In the 2023-2026 Stabilization Plan and the National Reform Program, the Ministry of Economic Affairs, led by Vice President Nadia Calviño, will allow extraordinary support measures to be withdrawn in 2023 and 2024 in response to the impact of the war. It was submitted to the 2023 European Commission. “Concerning the effects of exceptional measures arising from the energy crisis caused by the war in Ukraine, the measures approved in 2022 and 2023 are envisaged to be rolled back in 2024,” the executive said.
The government maintains the consumer protection plans in place in the event of a resumption of tensions in the electricity and gas markets, as a kind of safety net against possible exorbitant increases in electricity and gas bills for millions of homes and businesses. sale taxesceilings and direct assistance It continues to be extended until the end of 2023, when municipal and regional elections will be held in May and will, in principle, end with general elections in December.
The executive already predicts the seer Brussels It is possible to withdraw these measures, which are still in progress, next year.. Earlier this year, it ended the general discount of 20 cents per liter of fuel for all drivers, making it only applicable to professionals in economic sectors that are particularly affected by the cost of fuel, such as transport, agriculture, livestock or fishing.
Throughout the energy crisis the ministries of Economic Affairs, Finance, Industry and Ecological Transition advocated its implementation. limited extensions hedging measures temporarily (usually quarterly or semi-annually) to gauge the evolution of prices and determine whether their protection is justified or needs reinforcement. In the last expansion of the shield, this meant maintaining the validity of most of the energy measures throughout the year.
From the Ministry of Economic Affairs that the withdrawal will only affect interim measures directly related to energy and currently scheduled to be in force until 31 December, but reduction of species personal income tax low incomes or bonuses public transport yes they will stayAs explained by official sources from the Calviño-led department to El Periódico de España from the Prensa Ibérica group.
Inflation discount
The government argues that the “effectiveness” of the measures implemented to contain energy prices has allowed inflation to fall from double-digit levels reached last year (although food prices continue to skyrocket). The scenario envisioned by the executive is that the containment of inflation will be consolidated this year and the segment of the rise is less next year precisely because of the withdrawal of exceptional measures.
“The sharp fall in electricity prices will make it possible for companies to lower their production costs, which will help moderate the rise in prices due to the impact of competition. Until 2024, the rate of decrease in inflation will be moderate In the Stabilization Plan sent to Brussels, the note was dropped due to the gradual withdrawal of extraordinary measures taken to deal with the energy shock. However, according to the Spanish Central Bank’s projections, the path of disinflation is expected to resume strongly in 2025, which will push CPI growth below 2%.
The Bank of Spain hopes that all the protection measures implemented by the Administrator for families and companies have helped to lower inflation by 2.3 percentage points last year and also increase GDP national with 1.1 points Percentages specified by the institution in the annual report.
With shield during election year
During the two-year energy crisis, the Government is laying out consumer protection plans and providing a kind of safety net for the whole of this year in case of a resumption of tension in the electricity and gas markets. Spain and Portugal, supposedly extend until the end of the year Iberian exception, a mechanism that imposes a limit on the price of gas used in electricity generation in order to lower the final price of electricity. The cap, which expires on May 31, aims to ensure that the rest of power generation technologies are not affected by new gas price hikes that recorded historic highs during the energy crisis.
The mechanism has not been implemented for two months because the wholesale gas market price is below the ceiling set by the Iberian exclusion (65 euros per megawatt hour, MWh), but if gas markets become more tense, the Iberian hill will work as a lifeline for Spanish and Portuguese consumers. The end of the Iberian exemption is expected by the end of the year. newly regulated electricity tariff (PVPC) it is less linked to the evolution of the wholesale market to stabilize it, and an agreement may already be reached to reform the functioning of electricity markets in the EU.
The government also extended the tax cuts on electricity and gas bills until the end of the year, with the VAT reduction from 21% to 5% on both bills, and the temporary suspension of the 7% tax on electricity generation and electricity generation. reduction of excise duty on electricity to the minimum allowed by Brusselsfrom 5.1% to 0.5%.
The government stepped in at the end of summer 2021 as part of its initial shock plans to counter the blow of the energy crisis. a system that controls extraordinary profits electrical prevent them from taking advantage of the price increase to increase their income. In practice, the Executive has since set a ceiling price of €67 per megawatt hour (MWh) for nuclear, hydraulic and renewable electricity sales contracts and will maintain this for at least the whole of 2023. already had to return for excess income, which in just over a year reached 450 million euros.
In parallel, the Execution strengthened electricity social bonus for vulnerable consumers, temporarily extending electricity bill reductions up to 65% and 80% of the total amount (between 25% and 40% depending on the degree of initial vulnerability) as part of anti-crisis measures, as well as a ban on supply disruptions to vulnerable households. The government also created an exceptional and temporary new type of social bonus for middle-class homes due to the energy crisis and economic uncertainty caused by the war, giving families a 40% discount on their electricity bill. two adults and two children can earn up to 27,700 euros per year.
Help with gas bill
The government also shielded millions of homes from rising gas bills by capping increases in regulated rates, and also set a €19.55 cap on the maximum price a butane cylinder could reach. To mitigate the impact of the price hike, the manager injects subsidies directly financed with public money, which reduce the bills of customers with regulated gas rates by nearly 40%.
The government launched last October millionaire pack Taking measures to limit by law the increases that can be applied to customers with regulated gas tariffs until the end of 2023, and to establish a new type of discounted rate for centrally heated houses in the neighborhood.
The government covers the million-dollar deficit in the accounts of the Spanish gas system by these measures with a public budget, assuming the cost of the discount applied to approximately 2.5 million customers (although 5.7 million consumers are excluded from protection with free gas). market rates). This The public contribution required to subsidize the regulated gas tariffs is currently just over 500 million. Euro from October to the end of March.