Teresa Ribera said everyone will notice the difference in their electricity bills. / E.p.

Spanish government caps maximum gas price and pledges 'everyone will notice the difference in their electricity bills'

The measure will be in force for one year and will begin in approximately two weeks, following authorisation from Brussels

EDURNE MARTÍNEZ Madrid

Spain’s cap on gas prices has become a reality. This morning, Friday 13 May, the government agreed to fix the maximum price at 48.8 euros per Megawatt hour. The minister for Ecological Transition, Teresa Ribera, said this will reduce the average price of electricity from the present rate, which is about 210 euros/MWh, to 130, which is a reduction of about 40%. “Everyone will notice the difference in their electricity bills,” she said, “and it will be automatic. They will not have to do anything to benefit from it”.

The cap on the gas price will be in force for one year and is likely to come into force in ten days or two weeks, once the European Commission has studied and validated the text. It means the benefits will not be noticeable until mid-June.

Householders who have a regulated electricity contract will be the first to note the difference, but those on the free market will also benefit “progressively”, Ribera said, as their contracts with the electricity suppliers are renewed. She said the cap on the gas price will reduce domestic consumers’ bills by 37% and those of industrial consumers by 70%.

Criticised

Who is paying for this move? It will be financed by reducing the extraordinary profits of the electricity companies. “For us it is important that it isn’t the usual people who pay for this crisis,” said Ribera, who also explained that the electricity companies are not going to make losses but that they “have not been behaving in a way which reflects the situation we are experiencing”.

She also criticised Ignacio Galán, the president of Iberdrola, who has said people are “stupid” if their contracts were associated with the regulated market. She said his words were deeply embarrassing, and reminded him that, historically, consumers with a regulated tariff have always made greater savings than those on the free market.