The Environment Minister argues that, in the Government’s analysis, Galp is not entitled to any compensation if it has to move more gas to supply customers who return to the regulated rate. Duarte Cordeiro said this Wednesday in Parliament that the company is responsible for supplying the regulated tariff, using the gas contracted from Nigeria for this purpose. And that the benefit of these long-term contracts for the company, which result from a lower and more stable price than the market, is not limited to the regulated rate.

Duarte Cordeiro admitted, however, that the regulated rate may rise again (in addition to the 3% already approved for October), as Galp’s president warned on Monday, due to the price revision provided for in the aforementioned contracts. And even in the event of a change in the mix of supplies contracted to supply the regulated gas rate. “If Galp has changes in the contracts, it should reflect them in the prices.”

Galp warns those who return to the regulated market that gas prices may also rise

There was already an increase of 8% this year in the regulated rate, recalls Duarte Cordeiro, but it will never be an increase to the level of what is seen in the free market. “We will hardly have increases that bring us closer to the market price.” In responses to the deputy for the Liberal Initiative, Bernardo Blanco, the Minister for the Environment also underlined that the solution adopted by the Government of allowing the return of more than 1.3 million consumers to the regulated tariff gives consumers access to a lower price than the one that would result from a VAT reduction (it does not indicate whether for the 6% or 13% rate).

In the accounts already presented by the Executive, the change from the free market to the regulated one can allow savings of between 65% for families and 71% for small businesses, considering the increases announced by the main merchants as of October. They are 56 million euros per month and 640 million euros per year, Duarte Cordeiro stressed.

Traders with access to the cheapest gas at the rate. Government analyzes, but there are risks

The Minister of the Environment had already stated in a first hearing held this Wednesday in the framework of the examination of proposals for the European Energy Council that the Government is analyzing a proposal presented by the Liberal Initiative to allow access to gas to merchants of the free market, which is to supply customers at a regulated rate. A much cheaper gas than the one bought in the market. But Duarte Cordeiro points out that there are risks due to the responsibilities that this measure will impose in gas supply costs on the companies that ensure the supply of the regulated rate.

“We are going to see and carefully analyze the IL proposal” and “we are before the ERSE” (Energy Services Regulatory Authority). At stake is the access of free market suppliers, who will lose customers to the cheaper regulated tariff, to gas supplied by the long-term contract with Nigeria that is channeled in part to supply regulated market customers. In theory it would be possible, as in the case of electricity, for free market providers to offer a rate similar to the regulated one, but in practice there is no such capacity, because there is no gas with a comparable price in the market.

The Government estimates that the consumption of consumers who can return to the regulated tariff, around 1.3 million customers, represents only 7% of gas consumption. But now Duarte Cordeiro admits that there is a risk in terms of the volumes available. The minister also points out that there are several providers of last resort, although each of these companies operates exclusively in one region.

The reopening of the regulated market to residential consumers and small businesses was criticized this week by Galp CEO Andy Brown. Galp is the holder of the contracts with Nigeria that supply at a regulated rate and that, despite being lower than those of the market, are also subject to review due to the increase in raw material. In addition, there is a risk of interruption in the deliveries of this gas, as Duarte Cordeiro pointed out in the same act in which the president of Galp spoke. Although these risks are the same as those seen last year, they are not related to the situation of the war in Ukraine.

More than a thousand requests a day to return to the regulated gas rate. What can happen if you have electricity in the same contract?

This Wednesday in Parliament, the Environment Minister again admitted that “the best conditions are not yet in place” for interested consumers to switch to the regulated natural gas market, with lower rates, but assured that the service mandatory online ‘will help’. Companies have a period of 45 days to comply with this obligation.

The number of requests to return to the regulated rate has been increasing, but companies are finding it difficult to deal with so many processes. Galp, which controls the provider with the most clients, Lisboagás, still does not have the possibility of contracting online. The president of the company has already asked customers who want to change for patience.