GOOD NEWS: Spanish Gas prices capped until December

Spanish Energy Minister Teresa Ribera said on Tuesday March 28, that The European Union has agreed to extend the price cap set on natural gas until December 31, according to Reuters.

The energy minister told reporters in Brussels, “This tool allows [us] to keep protecting Spanish and Portuguese consumers until the end of the year.”

“The agreement enables the extension of this temporary mechanism that will cap the gas price at an average of 55 euros (£48.38) per megawatt-hour to 65 euros per megawatt-hour,” she said.

This agreement also extends to Portugal, known as the Iberian mechanism, after the two countries reached a deal with the European Commission in the spring of 2022. A scheme designed to bring down soaring electricity prices through which fossil fuel power costs are subsidised.

The government pays the difference between the cap and the market price, which soared following the Russian invasion of Ukraine.

As current gas prices are below the cap, Ribera said the mechanism is not applied. “Were natural gas prices to rise again we would manage to contain electricity prices at a reasonable level that would not depend on the price of natural gas.”

Previously the mechanism was set to expire on May 31.

Back in January, Ribera had said in January that the government wanted to extend the price cap until the end of 2024 and set the cap at 45 or 50 euros per megawatt-hour.

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