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File image of the ubiquitous orange butane gas cylinders. SUR
What will happen in July when the government ends the price cap on bottled butane gas in Spain?
Energy prices

What will happen in July when the government ends the price cap on bottled butane gas in Spain?

The tariff review in May was the last to apply the measure prohibiting any price increase above 19.55 euros

Almudena Nogués

Malaga

Tuesday, 28 May 2024, 11:08

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Changes are coming for users of the ubiquitous bottled butane gas cylinders in Spain. After racking up price increases of more than 15% in just four months, as of Tuesday 21 May the price of a cylinder of butane gas was reduced once again to 16.14 euros, some 53 cents cheaper. But this is not the only new development for gas customers. The price review for May was the last one to which the government's price cap has been applied. This measure prevented any price increase above 19.55 euros. What does this mean? Simple: "From now on we will no longer have this facility that limited the price of a basic necessity, especially one that is used by some vulnerable consumers", warned the Spanish OCU independent consumer and users organisation.

This change affects - the OCU explained - users of the traditional butane gas cylinder, which has a 12.5 kilogram load and weighs more than 9 kilos when empty. Butane bottles make up the majority of those consumed in Spain: 53 of the 68 million cylinders used in Spain. Other types of gas for domestic use have had price deregulation for years, so they can cost more than this regulated ceiling.

With the May review the price of butane has finally gone down: a cylinder will now cost 16.14 euros. Despite this decrease, it is still 6.6% more expensive than six months ago. The new pricing system for butane was taken up in 2015. "Since then, this tariff has undergone very significant variations in a short period of time, although there was a trend, an annual cycle, in which prices tended to rise in winter and fall during the summer," the OCU explained. In May 2022, a record price was reached, reaching 19.55 euros. From there it began to fall, although last autumn the running streak was broken and there were three consecutive price rises.

The new decrease approved by the Spanish Ministry for Ecological Transition and Demographic Challenge breaks a dangerous run of price rises. Strangely enough, the ministry did not use the full margin allowed of 5%, keeping the decrease to only 3.2%. We have to go back to July 2019 (almost five years ago) to see a similar scenario, without taking into account the price freeze imposed in the summer of 2022 when butane reached 19.55 euros per cylinder, its historical maximum.

What will happen in July?

So, what will happen in July? The OCU points out that we will find ourselves in a situation that has not been experienced since the summer of 2019: the absence of a tariff deficit or surplus to be reviewed. "Therefore, this summer the price will only be influenced by factors that determine how the market will evolve. Historically, it is usual to see decreases, but there have also been increases, such as in 2017, 2018, 2021 and, above all, 2022, when the price was frozen to avoid further increases", stated the OCU. The organisation issued a final warning: "Although the annual cycle of butane prices should help costs to fall, we are in a very volatile situation, and anything can happen."

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