A former president of the Competition Authority has said that when it comes to the electricity market, there’s no competition - EDP dominates the market and the prices charged to consumers.
Professor Abel Mateus had been called by the parliamentary committee of inquiry into energy revenues to give his opinion, "Reducing VAT on electricity is not a solution, it is only palliative," said the market expert.
"Faced with this serious and serious problem in our system, I think that reducing VAT is not a solution and it's just a palliative. There are serious problems that have to be tackled," said Professor Mateus who also said to the committee's MPs that they should, "start thinking about the new energy plan so Portugal can create an efficient system to the benefit of the consumer.”
"In the electricity sector consumers already bear a surcharge of around twenty three billion euros," claimed the expert.
The problem is not the VAT, 20 of the EU’s 28 countries have full VAT on electricity, the problem is that, "until now there has been no liberalisation of the market" and the various taxes and levies added to bills make Portugal's electricity bills the highest in Europe when compared to wages rates and buying power.
"We have been operating tariffs fixed by different contracts and time periods but what matters is what the consumer pays as a final price, they are not interested in theoretical prices."
"And how much do the operators get? They get what consumers pay because there is no escape," said the energy market expert, who added that, as yet, there has not been, "the opportunity to have a competitive market in electricity, nor even a concern to have one."
In order for a competitive market to exist, according to the Professor, "there must be a greater diversity of operators."
When Manuel Pinho was head of the Ministry of Economy, he asked the Competition Commission to give a presentation on its concerns about the electricity sector, said Abel Mateus.
"We drew attention to the lack of competition in the sector, presented proposals that were not met and we were not consulted again," said the Professor who added, "the only thing worse than a public monopoly is a private monopoly."
In an inspired performance, Mateus blamed the politicians for the poor level of competition and the consequent high price of electricty since liberalisation and left MPs with one question, "Will the Government be willing to reduce the market power of the dominant operator - EDP?"
The reduction of VAT on electricity from 23% to 12 or 6% is one of Left Bloc’s proposals for the 2019 State Budget.
