Portugal’s PM calls to cap EU gas price, reduce VAT

FILE PHOTO: Portugal's Prime Minister Antonio Costa gestures during a news conference
FILE PHOTO: Portugal's Prime Minister Antonio Costa speaks during a news conference to announce the gradual lifting of lockdown measures amid the coronavirus disease (COVID-19) pandemic, at Ajuda Palace in Lisbon, Portugal, March 11, 2021. REUTERS/Pedro Nunes

March 22, 2022

LISBON (Reuters) – Portugal’s Prime Minister Antonio Costa called on Tuesday for a maximum reference price for natural gas to be established in the European Union and for value-added tax on energy products to be urgently reduced to protect consumers from soaring prices.

European leaders are due to discuss new measures at a March 24-25 summit in Brussels, after gas prices jumped to record highs following Russia’s invasion of Ukraine. Speaking in Portugal’s parliament before the summit, Costa said any cap should not compromise Europe’s natural gas supplies.

The cap is needed so as to not “contaminate” electricity prices with soaring gas prices, he said. The price of electric energy at which all generators sell electricity in the wholesale markets is determined by the highest marginal cost of production, which is currently that of gas-fired power plants.

(Reporting by Sergio Goncalves, writing by Andrei Khalip, Editing by Catherine Evans)