Price of bottled gas expected to hit €40 by year end

The price of a 13-kg bottle of butane gas – the most commonly used by Portuguese consumers – could reach €40 by year-end due to pressure on energy prices, consumer association Deco Proteste has warned this week.

In a statement, the consumer protection organisation said the average price of a butane gas cylinder exceeded €37.50 in October, up from €34.11 at the start of the year and €37.31 in May, according to data from the Energy Services Regulatory Authority (ERSE).

Decopredicted, at the start of the conflict in the Middle East, that the price could reach €38 in the first half of the year – a figure it almost  reached – and now warns of further increases that could put additional pressure on household budgets.

According to the organisation, around 2.1 million households in Portugal continue to use bottled gas for essential needs (cooking/ heating water).

Geopolitical developments in the Middle East have contributed to pressure on energy markets, with knock-on effects on fuel and gas prices.

The association noted that, for bottled gas, production, transport and distribution costs, as well as fluctuations in international prices for petroleum products, also influence the final price.

Deco explains that the bottled gas value chain involves a time lag of around two months between changes in the price of the raw material and the consumer’s purchase of the product, predicting that the current rise in wholesale market prices will result in significant increases by the end of the year.

Against this backdrop, the organisation is calling for a reduced IVA rate of 6% on bottled and piped gas, in line with other essential goods and services.

Currently, bottled butane and propane gas and piped propane gas attract the maximum VAT rate of 23% – a situation Deco considers a burden on consumers, particularly as energy prices continue to rise.

The organisation estimates that, for a gas cylinder priced at €40, reducing IVA from 23% to 6% would save around €5.53, provided the tax cuts were fully passed on to the consumer.

The association also points out that the price of bottled gas includes the tax on petroleum products (ISP) and that, unlike road fuels, the government has yet to put in place a mechanism to offset this amount against the increase in IVA revenue collected by the State.

The organisation therefore considers it essential to adopt measures that make energy more affordable for households, particularly as over the border in Spain, a gas bottle costs less than half the amount it costs in Portugal (leading to nationals living near a frontier to buy in Spain, rather than here).

Source: LUSA