Government Announces Multi‑Billion Package to Cut Gas Bills for Millions
The government has unveiled a sweeping plan valued at several billion euros aimed at cutting gas costs for more than three million households. The centerpiece is a 3,000 million euro anti-crisis shield designed to limit by law any increases in the regulated gas rate through 2023. It also introduces a new tariff type that could cut roughly half of a typical bill for around 1.7 million homes with central heating in neighboring communities. This approach reflects a direct effort to shield vulnerable families from volatile energy prices while maintaining a safety net for the broader energy system. The strategy is framed as a temporary bridge during the ongoing energy crisis and seeks to stabilize household budgets in the near term.
Gas industry stakeholders have shown support for the government’s objective to curb the impact of rising gas prices on consumers. They acknowledge that households are particularly exposed to price shocks and welcome measures that ease the burden, even as they anticipate the relief to be short lived. Industry representatives caution that the plan is focused on regulated rates and may not fully address market dynamics. They emphasize that market prices and freedom of choice remain factors for many customers, and that tax relief, while helpful, is part of a broader mix of measures. The dialogue centers on balancing consumer protection with maintaining viable competition within the gas sector.
The associations representing suppliers and network operators warn that compensations designed by the government could trigger a migration of customers toward regulated rates. A large portion of customers could end up with prices that are markedly lower than those available in the free market thanks to last‑resort tariffs. This shift could challenge the sustainability and competitiveness of a liberalized market that has evolved over two decades. Critics contend that a rapid migration toward regulated pricing could undermine the competitive process and threaten system stability.
Industry voices acknowledge the necessity of measures to shield consumers from price spikes while preserving protections for all shoppers. The gas sector broadly supports a VAT reduction on the gas bill from 21 percent to 5 percent by year’s end and argues for additional tax reliefs that echo the benefits already enjoyed by electricity users. The sector also calls for a reduction in other fiscal charges that drive the cost of gas and electricity for end users.
The call from gas companies extends to the reduction of the Special Tax on Hydrocarbons, aligning with the minimum thresholds allowed by European Union rules. At present, the tax applies a rate of 0.65 euros per gigajoule to local and many industrial customers, with EU guidelines permitting a lower floor of 0.30 euros per gigajoule. This tax policy debate sits at the heart of the energy price discussion in the bloc and reflects tensions between national relief efforts and broader fiscal harmonization.
Only a handful of utilities still offer regulated gas rates. Those companies, including Naturgy, Endesa, Iberdrola, and TotalEnergies, are legally required to provide the regulated option. In recent days they have faced increasing questions about their move back toward regulated pricing, signaling a potential long-term shift in the customer mix. Regulatory bodies such as the National Markets and Competition Commission are closely watching developments to ensure fair competition and market stability.
Today, the number of households taking advantage of free market gas prices remains higher than those on regulated plans. Free tariffs, set by individual companies, have historically moved with global hydrocarbon trends, though there is a ceiling on annual increases for regulated rates. Data from the previous year show roughly 6.5 million customers on free tariff contracts, while about 1.5 million still used regulated rates. This distribution underscores the ongoing tension between market liberalization and price containment for vulnerable families.
The government has pledged to allocate the full public budget required to close the financial gap created by the relief measures. A royal decree, approved by the cabinet, outlines a plan to deploy 3,000 million euros in exceptional loans to cover the immediate costs. Officials stress that the allocation is a temporary response and will be adjusted as necessary to address the evolving gap in the gas system. The policy package is designed to stabilize the sector and protect consumers while the broader energy markets adjust to shifting price signals.