The new Portuguese government is considering introducing a tax or rate on energy companies that record “accidental and unexpected” profits from the energy crisis caused by the Ukraine war. That tax or Storm, In Anglo-Saxon terminology, it will be used for an additional 30 euros per megawatt hour (megawatt-hour) of gas produced by the governments of Madrid and Lisbon with the European Commission.
The idea was put forward in the Portuguese parliament last Friday by the new Minister of Economy and Maritime Affairs, Antonio Costa Silva, after he was asked by MP Mariana Mortagua from Bloco de Esquerda about the “excessive” profits of certain large companies. Mortagua cited oil companies, power companies and food distribution companies as “taking advantage of the moment to increase their prices and their margins,” he assured.
Costa Silva noted that the new government “probably” intends to consider some kind of tax against the additional benefits of some companies, which he did not specify, although in Portugal it is believed that this will affect energy companies: “We can not. We harass companies, but what are we going to do, talk to them and maybe consider paying taxes or Unexpected tax “For the occasional and unexpected benefit they have,” the minister said.
This Monday, Costa Rica, one of the highest corporate tax rates in Europe (31.5% of profits, compared to 25% in Spain), followed the agitation in the country’s most conservative sectors, according to Eurostat. They explain that “currently there is no such event, but we appreciate all the opportunities.”
The new Portuguese government will approve a package of 18 emergency measures this Monday in the wake of an energy crisis (including cuts in a special tax on hydrocarbons before the EU allows a announced reduction in VAT on fuel), Costa Rica. He insisted: “We are doing all the X-rays of the sector, and if there were any unexpected and accidental benefits, we will be careful, because the state does not have unlimited resources.”
If “similar situations are detected, if a company that had a 20% profit is temporarily 80% profit, the situations are above the normal profit margin, we can talk to these companies in an agreed manner.”
Costa is a former Portuguese oil industry executive with more than 30 years of experience in the sector, who was elected in 2020 by Portuguese Prime Minister Antonio Costa to develop a post-COVID recovery plan.
The new minister believes that “we experience exceptional situations and sometimes it is necessary [adoptar] Special measures to demand “efforts from companies to help the economy.”
“This is not a drama or anything new. The United States has it, Spain has it, Italy has it, other countries have it,” the new minister assured. Unexpected tax.
Spain did not impose any emergency taxes on companies, a measure proposed by a second vice president, Yolanda Diaz, to power companies a few weeks ago, before the approval of a national response plan against the war, and before Spain tried to remove it. An obligation from the European Commission (eventually reached by Pedro Sanchez and the Prime Minister of Portugal) to allow the Iberian decision to reduce electricity bills on the grounds of the peninsula’s poor relationship with France.
In September, when the energy crisis had already begun due to a sharp rise in natural gas, the Spanish Ministry of Environmental Transition had already introduced a mechanism to reduce the extraordinary benefits of power plants (mainly nuclear and hydropower). Exponential growth of this raw material. The government was then forced to rectify it, abandoning bilateral agreements.
But that mechanism has now been strengthened since the European Commission called last month to implement the mechanism. Unexpected taxProvided they are not reversible. Brussels, which has done so in accordance with the recommendations of the International Energy Agency (IEA), has included this opportunity in a package of possible measures by member states to deal with the energy crisis caused by the war in Ukraine.
In Spain, this system of controlling the additional benefits of companies has recently been strengthened, with the inclusion of renewed and now signed electricity contracts in this reduction mechanism, which sets a price limit of 67 Euros / MW for sold energy. End customers.
This mechanism is like Unexpected tax That (in the absence of additional details) the Portuguese government is now learning to create, it will work in parallel with the 30 euro / MWh limit for electricity generation with the combined cycle plants offered by Spain and Portugal and analyzed by the European Commission.
The Portuguese government has indicated that compensation for gas plants for the difference between this reference price and the actual price of this raw material will accrue a tariff deficit (delay that will be paid in the future). As projected, according to the Costa Rican government, this means saving € 690 million in energy costs for Portuguese companies and households.
For her part, Third Vice President and Environment Minister Teresa Ribera ruled that the compensation would become a tariff deficit in Spain, pointing out that the mechanism was “going to pay consumers”, albeit at a final price. It will be much lower than the invoice: Ribera says the receipt will be halved if Brussels receives this 30 euro limit. It is possible that the threshold will be exceeded to make the proposal acceptable to the public authorities.
Sources in the commission explain that they are “in contact with the Portuguese and Spanish authorities on this issue” and that Brussels “is committed to” urgently assessing whether the interim measures proposed by the member states are in line with European aid regulation and internal energy. Market, reports Andrew Gill.
Vice President Ribera last week expressed concern that energy companies were trying to “turn over” the mechanism, which a recent study by MIT in Massachusetts said could lead to a “distortion” in the market.
This report supports the benefit of this rate falling from the sky: according to its authors, it will not affect the prices of the wholesale electricity market and will have a less distorted impact on electricity demand and exchange with France. The report, which talks about possible gas rationing in Europe amid a “potential winter deficit scenario”, said it was “shocking” that the European plan was not designed to reduce energy consumption, especially domestic energy.
Source: El Diario
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