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There will be a 9% reduction in natural gas receipts from October due to the VAT cut

There will be a 9% reduction in natural gas receipts from October due to the VAT cut

The natural gas rate will go down about 9% from next month October for regulated market clients. The decision of the Government to reduce VAT from 21% to 5% It will allow to mitigate the 5% average increase that was about to happen to domestic consumers due to the result of the formula that sets gas prices quarterly and reflects the evolution of international markets.

With this measure, the Government prevents the price increase that was registered in the gas at the gates of the harvest when consumption increases. This reduction also comes at a time when Spain must face a decline consumption to reach the savings target set by Brussels.

At the end of next week, the Government will present the contingency plan it has prepared for the European Commission in which it must detail the energy saving measures it is taking. implemented to help increase safety supply in Europe. At the same time, Teresa Ribera’s department must convince the Community Executive not to take into account the increase in the use of gas needed to produce electricity for export to countries such as France and Portugal with combined cycles within of those objects and leave the door open. with a lower reduction obligation for industries.

This price reduction on the last resort gas tariffs also means that the price difference available to marketers for free.

Level of competition

According to data from the National Markets and Competition Commission comparator, an average consumer you can expect to pay more than double if you contract the gas on the free market than if it is within the regulated rate, a difference that has increased since the Government’s decision to intervene on the gas rate in March 2022.

The Council of Ministers decided to set a 15% limit on the increase raw material cost max in his calculation formula until January 1, 2023, which opened the door to generate a gas tariff deficit that is expected to be compensated in the coming years when the reduction in the cost of the raw material corresponds.

This market situation is detrimental to the small gas marketers who had customers families in the free market,since they now have an economic incentive to return to the regulated market to avoid increases and with one less sales pitch for their commercial.

When the price of gas returns to normal, customers on the regulated market will have the power to switch back to the free market and therefore not. against the unpaid sums Now. This situation could lead to higher increases for those who remain in the regulated market and, in general, those with less purchasing power.

The measure can also give another twist, since any a client that electrifies part of its supply (gas cooker with ceramic hob) also stop paying this amount or at least a part of it depending on its consumption.

Another key factor can be added to this casuistry. If the sustainability fund comes into effect and if electricity prices register a sharp fall due to the measures of an intervention being madethe incentive to electrify consumption will be greater and, once again, all those less able to absorb those costs will have to bear the surcharges on accumulated consumption.

In terms of gas customers, the share of the five main operators is 94.6%. The rest of it operators add 431,034 gas customers. Among the small operators, the ones with the biggest growth are the MET group and the Factor Energía group, with an increase of about 2,800 and 1,400 customers, respectively, according to the latest data from the CNMC .

Customers supplied at the final option rate are 1,525,344 (19.12%). an increase of 3,726 clients compared to December 2021. In terms of sales of natural gas in the first quarter of 2022, the demand for natural gas reached approximately 107.93 TWh, an increase of 8.84% compared to the same period of the previous year.

According to Enagás data, up to August, gas consumption i Spain increased by 5.1% due to the strong increase in its use to generate electricity (85.7%), while normal use decreased by 15.2%.

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