Portugal to help gas-hungry companies to pay their bills, minister says

div classBodysc17zpet90 cdBBJodivpBy Sergio Goncalvesp

pLISBON Reuters – Portugal‘s government on Monday announced a nonrefundable subsidy to gashungry companies, such as cement, steel and glass makers, to cover 30 of the increase in their bills spurred by Russia’s invasion of Ukraine.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pEconomy 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.

pThe 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.

pData 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.

pThe 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.p

pThe 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.p

“It would be a last resort situation. But the government doesnt 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 coalfired power plants.p

The price of electricity was around 240 euros per MWh in the MIBEL. Throughout 2021, the average price was 112 euros.

1 0.9166 eurosp

pp Reporting by Sergio Goncalves editing by Inti Landauro and Bernadette Baump

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