Eurostat certifies that Sánchez fulfilled the promise that the 2021 electricity bill would be “similar” to that of 2018 | Economy

Even before the war in Ukraine, the electricity bill had triggered some social alarm. Although prices started in 2021 at a low, they rose steadily throughout the year to reach heights never seen in wholesale markets. Faced with this escalation, the President of the Government, Pedro Sánchez, said in an interview with EL PAÍS: “We are working with a plan to reach a specific commitment, and that is that at the end of 2021 the Spaniards look back and see what they have paid in the electricity bill a similar amount and similar to the one they paid in 2018. That is the objective and the commitment: that all citizens with an average consumption at the end of 2021 pay a similar amount and similar to the one they paid in 2018, logically with the CPI discounted”, he stated.

Eurostat, the statistical office of the European Commission, released this Tuesday the data on the electricity bill of the Spanish. And with that information in hand, the Government could say that it complied. “Eurostat has published the electricity prices paid by households in the EU during 2021, confirming that the commitment made by Pedro Sánchez has been fulfilled,” Moncloa reported on Tuesday. According to Eurostat, a Spanish household paid an average price of 0.2595 euros per kilowatt hour (kWh) in 2018 if the inflation rate between December 2018 and December 2021 is applied. And that amount is higher than 0.257 euros last year’s kWh.

How was it possible if prices did nothing but rise throughout the year, reaching all-time highs in December? First, the Government uses data from Eurostat and not from the National Institute of Statistics. The former include those of all Spanish households: those of the free market (16.2 million households) and those of the regulated market (10.5 million). The Spanish institute, on the other hand, only takes into account families with a regulated rate, which is much more volatile.

fiscal measures

Government sources assured that only those of Eurostat collect the reality of prices in Spain. In his opinion, there are not only two markets, since within the regulated market there are more than a million users who have a discount on the social bond, and within the free market, a multitude of bilateral contracts. The Executive takes into account Eurostat, in addition, because it allows to see the behavior of the average Spanish home, which uses between 2,500 and 5,000 kWh (the average consumption in Spain is between 3,000 and 3,500). And it is in that strip in which the Government is fixed.

Second, Sánchez accompanied that promise with a package of measures, among which there was a reduction of 97% of charges on the bill, a reduction of VAT from 21% to 10%, a reduction of the electricity tax to 0.5 % and a suspension of the tax on electricity generation. In addition, he expanded the benefits of the social bonus. And third, the Government’s calculations apply inflation – to which Sánchez also referred – which in the period between 2018 and 2021 was 6.8%.

Finally, the year was tremendously volatile: it reached highs in December, but in February prices had been very low. Executive sources recall that this is also happening now by the hour: when more wind and solar energy enters, the rates are lower. Even so, all these measures did not prevent Spain from having the fifth highest bill in the entire EU, only behind Denmark, Germany, Belgium and Ireland.