Environment Minister Duarte Cordeiro said Thursday that Portuguese consumers will pay less for energy next year than in 2022. But he is asking consumers to stop “inertia” and compare prices from energy providers so they can have “significant savings.”

At a press conference on energy prices for 2023, Duarte Cordeiro said that if 2022 was marked by a “very significant” increase in energy consumption above inflation, which ultimately led to higher inflation, which is what the government expects in 2023, “is prices remain below the rate of inflation” by pulling the indicator down. In general, “energy prices will weigh less in the portfolio of the Portuguese, they will be below inflation and pull inflation down,” he predicts.

“All of our estimates are based on assumptions that allow for the prospect that we will be in a better situation in 2023 than we are today. It is enough that the December trend continues at the beginning of the year,” he added. This reduction could be 55% of electricity for households and 24% to 38% for companies.

The regulated tariff will increase by 1.6%, i.e. below the inflation forecast by the Government, and there will also be updates in the liberalized market. Duarte Cordeiro says that in the case of the gas market, the regulated tariff is currently “significantly” below the liberalized market tariff, around 65% for consumers and 70% for small businesses. “A regulated rate is definitely an option that offers significant savings for families and businesses,” he emphasizes.

However, this does not happen in the electricity market, and in a liberalized market it is possible to find suppliers with below regulated prices. The minister is asking consumers and businesses to kick “habit or inertia” and compare offers on affordable exercise machines that can guarantee them “significant savings.”

Asked how he can ensure that prices are lower in 2023, the minister explained that the central element that allows prices to vary is the production of renewable energy – hydroelectric production is increasing, as well as solar and wind. “What is the trend of the price of renewable energy production in total electricity has an upward trend,” he said.

Regarding the Iberian electricity mechanism, Duarte Cordeiro reiterates that both Portugal and Spain want it to be extended beyond May, but says there will still be talks between both governments to agree on positions to submit a joint proposal to Brussels. In 2022, the mechanism delivered benefits to consumers of about “17%, 18% net”.

The end of the carbon tax update suspension will be gradual

The government will gradually end the suspension of the carbon tax update. When asked if the government would take the same measure as in Spain to end support for 20 cents per liter of fuel, Duarte Cordeiro replied that the Portuguese executive would not go down that path, and in the case of carbon, its introduction would be gradual. “We are working on a phased solution to phase out the carbon tax exemption. It won’t be on the same terms [de Espanha]”, said.

The suspension of the carbon tax update was one of the fuel price containment measures in place until the end of the year. The decision to phase out tax benefits is being worked out with the Ministry of Finance.