By Sergio Goncalves
LISBON - Portugal's government on Monday announced a non-refundable subsidy to gas-hungry companies, such as cement, steel and glass makers, to cover 30% of the increase in their bills spurred by Russia's invasion of Ukraine.
Economy Minister Antonio Costa Silva said all companies whose gas costs are equal to 2% of their turnover and which saw, since February, their bills double compared to a year ago, were eligible to ask for the subsidy.
The government will initially allocate 160 million euros ($174.56 million) "to this first package to preserve their productive capacity, as much as possible," he said. Each company will be able to receive a maximum subsidy of 400,000 euros.
Data from the Iberian wholesale market MIBGAS showed that gas was trading at 97 euros per MWh on Monday, compared to around 20 euros a year ago.
The cost of energy, which had already surged as the effects of the pandemic ebbed, skyrocketed following the Russian invasion of Ukraine and the impact of this on the international gas market.
The Portuguese government is also studying a tax on windfall profits of energy utilities, such as hydro and wind power generation ones, which are benefiting from rising energy prices without incurring additional costs.
"It would be a last resort situation. But the government doesn't have infinite funds nor will it be able to help all sectors", Costa Silva said.
Prices at which Portuguese and Spanish generators sell electricity in the regional wholesale market (MIBEL) are determined by the highest marginal cost of production, which is currently that of gas- and coal-fired power plants.
The price of electricity was around 240 euros per MWh in the MIBEL. Throughout 2021, the average price was 112 euros.
($1 = 0.9166 euros)
