Soaring energy prices could stall economic recovery

The rising price of natural gas over the past few months to historic levels is putting such pressure on the price of wholesale electricity in Portugal that it could stall the country’s economic recovery according to Portugal’s President, Marcelo Rebelo de Sousa.

“I know there is widespread concern and even in Rome I heard this concern from various countries,” he told the Lusa news agency, adding that it could act as a brake or a slowdown on economic recovery.”
The statement came as the Portuguese Government puts forward proposals to stop price hikes on household electricity bills at least until 15 October.
The Secretary of State for Energy João Galamba said on Friday that the government would not spend €300 million on “energy from the past to lower taxes on fossil fuels, but would act now to counter the volatility of the market and the high prices of energy.
High global demand, maintenance issues at some gas sites and lower solar and wind output are blamed for the rise. Other reasons include Russia’s decision to limit gas exports and the rising demand and cost for CO2 emission licenses.
By 15 October the government will present the energy regulator ERSE with its tariff suggestions for 2022 which would stop a significant increase in energy bills and provide a “cushion” for Portuguese families.
However, the secretary of State has admitted that electricity prices for Portuguese consumers could go up 1% or 0.5% but not anywhere between 30%, 40% or 50% as other European countries including the UK are facing.
PSD party opposition leader Rui Rio said the “issue of energy was very serious for the recovery of the economy which certainly would slow down as production costs for manufacturing companies went up.”