Spain assesses measures to cut electricity bills as prices hit record highs
The Spanish government is considering further measures to reduce rapidly rising electricity bills, Consumer Rights Minister Alberto Garzon said on Tuesday as electricity prices approached record highs, alarming consumer groups. A heat wave in the Iberian Peninsula has boosted the use of air conditioning, resulting in increased electricity consumption and further upward pressure on prices in an overheating market due to rising gas prices natural and carbon certificates.
“The line we are taking is structural measures that will make electricity prices affordable in the medium to long term and extraordinary measures so that all families in this country can cope with this situation,” Garzon told reporters. , adding that any measure would target families and small business bills. In a statement, consumer protection group Facua demanded that the government act quickly to reduce prices through a permanent reduction in value-added tax, a 50% subsidy for low-income families and a cap on what utilities can charge.
Last month, the government agreed to reduce the rate of value added tax on electricity to 10%, from 21% when the average monthly price exceeds a certain threshold. It also suspended in the third quarter a 7% tax on the value of power generation, which utilities ultimately pass on to the retail market. The average daily price of electricity in Spain and Portugal hit a record 106.57 euros per megawatt hour on Tuesday, according to OMIE, the operator of the Iberian electricity market.
More than half of the price paid by consumers in Spain is made up of taxes and compulsory contributions. The rise in electricity prices has coincided with a new formula for calculating household consumption according to the hours of the day, which has upset many Spaniards who believe it is pushing up tariffs.
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