The Council of Ministers has approved a new set of measures to alleviate the current escalation in energy prices unleashed by the war in the Middle East. The new shock plan recovers the 20 cent reduction on gasoline and diesel since October, and until December 31, an aid that will be modulated depending on inflation. In addition, the Executive is going to intervene in the regulated gas and butane rate.
Until now, the Executive has maintained a Hydrocarbon Tax bonus of 20 cents per liter for diesel and another 5 cents in the case of gasoline. But the mattress expired at the end of September. In their meeting today, which has been delayed for more than an hour due to the in-extremis negotiation of PSOE and Sumar on new measures regarding housing, the ministers have also addressed a new contingency plan against the energy shock, the third that the coalition Government has had to launch since hostilities between the United States and Iran began at the beginning of the year.
The new framework, according to knowledgeable sources, restores a schedule of tax cuts subject to "review clauses." The aid will be 20 cents in October and, predictably, will go to 13 cents in November and 6 cents in December. Furthermore, the Government is going to cap both the regulated gas rate, to which 3.1 million homes in Spain are covered, and the butane cylinder, as reported today by the economic newspaper Cinco Días and confirmed by the Minister of Ecological Transition, Sara Aagesen, early in the morning. In detail, the Executive is going to limit the increase in the Last Resort Rate (TUR) for natural gas to 35% in the next review, which is in October, and to 15% in the one after that, three months later. Without this intervention, it was headed for an increase of 45% for next month. In addition, it will establish a maximum price of 19.55 euros for the butane cylinder.
In recent days, the Minister of Economy, Carlos Body, has led a round of contacts with different sector associations, from energy to transport, to assess the situation in the markets and the threat to supply security of a prolonged blockade in the Strait of Hormuz, a situation that has significantly strained the global supply of oil and gas. Added to this these days is Donald Trump's threat to cut off diesel exports to Europe, a measure that would put the Twenty-Seven in an even more critical situation and which has already provoked the reaction of the European Commission.
More than a possible shortage, what worries and occupies the Government are the prices. Aagesen has framed the containment measures with the arrival of winter, when temperatures drop and, above all, gas consumption for heating skyrockets. Aagesen explained that this third package will include "measures that were already outlined in the previous crisis situation, in this case in Ukraine."
In recent weeks, Sumar had resurrected the so-called Iberian exception, a mechanism that Spain applied, between June 2022 and December 2023, to prevent the escalation of gas from infecting electricity prices in the harshest months of the energy shock. It consisted of limiting by law the price charged by combined cycle plants, which use gas to generate electricity, which were compensated a posteriori. Cycles were the most expensive technology on the daily market (pool). For this reason, by intervening in their offers, the Government managed to lower the marginal price charged by the rest of the technologies, the so-called inframarginal ones (nuclear, hydroelectric and renewable).
The Iberian exception required a tough negotiation with Brussels, to prevent gas compensation from being considered illegal state aid, but it notably mitigated the blow of the gas escalation in the pockets of consumers. One of its direct consequences is the reduction in income from renewables, which charge at the price of gas when the cycles set the price. This effect now worries the Government, especially when photovoltaics are already talking about bailout due to their delicate financial situation. The large electricity companies also oppose the measure, arguing that it encourages the consumption of more gas to generate electricity, when Spain is moving in the opposite direction. Several sources close to the negotiations indicate that the gas cap is not on the Executive's table today.
The Corps team has carried out the latest negotiations with special caution. These have taken place while inflation has once again made its way into the Spanish economy (it rose to 4.9% in September). The Government's urgency to contain the prices of electricity, gas and fuel before the cold arrives collides with the lack of Budgets. And the budgetary restraint increasingly limits Moncloa's margin to pay for a social shield worthy of the circumstances.
Aagesen asks for a tax on oil companies
Aagesen has taken advantage of his intervention in Dublin to calm the waters. In relation to the tensions in the diesel market, the vice president recalled that, as of today, there are no restrictions on the export of this fuel in Europe. Although he has urged "to remain vigilant", he has also stressed that Spain faces the situation in a better position than other partners thanks to its eight refineries and a dependence on imports of less than 1%.
