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Electricity to rise by 4% next year

By CHRIS GRAEME [email protected]

Electricity prices, initially expected to increase by as much as 32% in 2012, will now go up by around 4% on domestic bills, it was announced over the weekend.

At the same time, a new ‘special tax’ on electricity consumption, resulting from the agreement with the ‘Troika’, will add around €2 to €3 annually onto the cost of the average family electric bill (normal low tension).

It means that the average household paying around €50 a month on their electricity bills will fork out an extra €1.75, excluding the special tax, from January 2012.

VAT on electricity and natural gas increased from 6% to 23% this month, representing an additional €100 million for the State coffers.

The Government’s proposal in the State Budget 2012 for the coming year lays down that the maximum special tax that can be applied by the Government on electricity consumption should stand at a maximum of one euro for each megawatt per hour used (MWh).

According to the Portuguese Energy Service Regulator (ERSE), each family in Portugal in 2011 will consume an average of 2.9 MWh per year.

Based on this calculation, the special tax, which in part derives from a European Directive on energy, should stand at around €3 per year on domestic bills.

The final amount to be charged on bills has yet to be defined in law, but vulnerable consumers such as  pensioners on a low income and the poor will be exempt from the special tax.  

The new calculations took into account the opinions of the regulator ERSE which made its position public on Monday. The new electricity tariff will become law on December 15 when passed by the Council of Ministers.