TAXES on electricity bills in Spain will continue at lower rates until at least April 2022.

The announcement was made in Congress this Wednesday by Finance Minister, Maria Jesus Montero.

The news came as wholesale prices are predicted to exceed €300 per megawatt hour on Thursday in another record-breaking high.

It’s been caused by a combination of increased natural gas prices; a lack of wind power; and a rise in carbon dioxide emission rates.

The tax cut on bills will cover a period where wholesale market prices are expected to remain at high levels during the first quarter of 2022.

The raw electricity price is now six times higher than a year ago.

Maria Jesus Montero did not specify if tax reductions would be maintained at the same level, though unofficial indications suggest that will be the case.

IVA on bills were cut in October from 21% to 10% along with the elimination of a 7% ‘generation’ tax paid by power firms and the reduction of an electricity tax from 5.11% to 0.5%.

Tax Agency figures for October showed a loss of €262 million in IVA income and €72 million from the virtual elimination of the electricity tax.

In the summer, Prime Minister Pedro Sanchez pledged that household power bills by the end of the year would not be any higher than those in 2018.

Official figures show that target to be way-off and Wednesday’s electricity price index produced by the National Statistics Institute said November’s bills were 47% higher than a year earlier.

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