State budget 2019 can reduce electricity bills by “more than 10%”
The Government believes that the State Budget for 2019 can bring a reduction in electricity bills of more than 10%. The decrease was negotiated with BE, leftists, and PCP, the communist party.
Despite Mibel’s increasing energy prices, and ERSE’s announcement of a 0.1% tariff increase, BE and PCP had negotiated a decrease in the electricity bills, a measure which is part of the State Budget 2019, delivered at the Parliament this Monday.
Although 5% was the expected level of decrease for the energy bills, according to the State Budget Papers the government expects the energy bills to go down even further, by 10%, during the next year. António Costa’s administration negotiated many ways to lower energy bills, in order to reduce their weight for Portuguese families, and these have been confirmed in the OE2019 final documents, delivered last night.
“This government will continue to bet, for the next year, on reducing the energy bill”, the State Budget report reads. In order for this to happen, there are three main measures:
- The incoming revenue from the Extraordinary Charges on the Energy Sector (CESE) will be relocated so that it can be deducted from 2018 and 2019’s tariff deficit
- the CESE’s scope will be enlarged to companies which produce renewable energies (giving the State an income of €30m next year)
- VAT reduction, from 23% to 6% on the contracts not surpassing the 3.45 kVa’s line (the lowest energy use, usually related households energy consumption) and those below the 10.000 cubic meters per year in terms of low-pressure gas consumption.
The government has already transferred €190m from the CESE in 2018 and it expects to get €200m in 2020 in order to continue backing up the lowering of the VAT on electricity bills.
Decreasing the VAT on energy bills is also going to promote the decrease in terms of energy usage, according to the report, which predicts that “the lowering of the VAT is based on a fixed amount of usage, and therein this might contribute for the decrease in the amount of energy consumed”.
The ERSE proposed a 0.1% tariff increase the same day the state budget was released, justifying the increase with the upward trend in energy prices in the Iberian markets.
