By James Bryce
SPAIN is to reform its energy sector as part of tough austerity measures.
The controversial two-phase overhaul will involve a new tax regime for the industry, followed by a shake up of the energy market.
The financial crisis has forced the government into making €65 billion of cuts, €8.6 billion of which will come from new energy and environmental taxes within the next three years.
Among the reforms being considered is a tax on the purchase of natural gas, although any such tariff would not be introduced until 2013.
Under current legislation, energy companies cannot charge consumers above a certain threshold, which is not high enough to cover their costs.
This has created a €24 billion tariff deficit which the government has so far had to compensate through subsidies.
The plans have caused friction between the treasury and industry ministers over how the reforms will be implemented, while energy firms Iberdrola, Endesa and Gas Natural claim the plans will wipe out their profits.
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