Shock in the electricity sector over Yolanda Díaz's defence of oil companies' profits

The price of gas must be stopped because it is dragging down the whole economy. This is the mantra that has been repeated since last summer when gas prices began to spiral out of control. This is why the words of the Second Vice-President and Minister of Employment, Yolanda Díaz, in which she took a stance in favour of gas and oil companies after expressing her support for imposing a tax on electricity companies, have caused astonishment.

In contrast to what has happened with the oil and gas companies, which have seen their margins grow and grow, electricity companies have cut their profits precisely because of the price of gas. The sector cannot explain it. "Citizens are paying two euros per litre of petrol. The Vice-President's statements are obscene", say sources in the sector.

Of the total number of customers that electricity companies have, three quarters enjoy fixed prices. What is more, the increase in the price of gas causes a reduction in their profits while, on the contrary, they increase in the oil and gas companies. Precisely this rise in prices has had a negative impact on the profit and loss account of electricity companies, as they need gas to produce electricity and meet demand.

The use of fossil fuels by electricity companies is a cost for them, a reduction in their profits, quite the opposite of what happens for oil and gas companies. If you take a close look at electricity prices last year, you can see that they only increased in the regulated tariff, which is subject to the vagaries of the market, which sets the price, and did not vary in the deregulated, fixed tariff. This second tariff covers 80% of the country's electricity demand. On the contrary, we have seen how petrol and gas prices have risen enormously, as never seen before.

It is enough to look at the data to illustrate this situation. Endesa closed 2021 with an ordinary net profit of 1,902 million, 11% lower than the previous year. Iberdrola, for its part, obtained a net profit of 2,408 million euros in the first nine months of last year, 10.2% less than in the same period of 2020.

If we had to explain where the profits of the two main electricity companies in this country have come from, we would have to look outside our borders, since in Spain, customer prices are mostly fixed.

Gas and oil companies did close last year with extraordinary profits, as their accounts show. Repsol, for example, obtained an adjusted net result of 2,454 million euros. A year earlier it had closed the year with 600 million euros. The growth is evident.

CEPSA has reached a net profit of 661 million euros in 2021. This figure buries the losses of 919 million in 2020. The gas company Naturgy achieved a profit of 1,231 million euros, 41% more than the previous year. Naturgy has had no problem admitting that this growth was due to price rises.

In short, the skyrocketing increase in fossil fuels has taken us further away from the 'zero emissions' objective and has made the population poorer. In addition, the rise in fossil fuel prices has had an impact on electricity production by forcing them to buy gas to produce electricity. "Only ignorance can lead the Vice-President and Minister of Employment to make demagogy, to be untruthful and to defend the oil companies against the rest of the industries that are seeing their profits cut, such as the tile industry, the electricity companies or the construction industry", say business sources.

Likewise, they point out with a certain degree of derision: "Now we can explain why there are directors of the big gas companies as directors of the ministries of the national government".