Portugal Approaches Energy Crisis Declaration Amid Rising Gas Prices

Portugal is nearing the threshold for declaring an energy crisis due to escalating gas and fuel prices, as indicated by Environment and Energy Minister Maria da Graça Carvalho. She noted that meeting the European Union's criteria would enable the government to implement protective measures for families and businesses. The EU's Directive 2024/1788 outlines conditions for declaring a natural gas price crisis, which includes average wholesale natural gas prices reaching at least €180/MWh or a 70% increase in retail prices. Carvalho emphasized that such a declaration would not signal a supply shortage but would serve as a protective mechanism against price shocks.

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The Portuguese government is contemplating temporary measures to mitigate the impact of rising energy prices. António Leitão Amaro, the Ministry for the Presidency, stated that these measures could include price limitations and would be confined to the duration of the EU's crisis declaration. However, he clarified that Portugal is currently far from meeting the EU's crisis thresholds. The Ministry of Environment and Energy highlighted that natural gas prices have surged significantly, driven by global supply disruptions, particularly from Qatar, while electricity prices remain relatively stable due to the country's reliance on renewable energy sources.

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The concept of an energy crisis is not new to Portugal. A previous declaration was made on April 28, following a blackout in the Iberian Peninsula, allowing the government to adopt extraordinary measures to ensure essential energy supplies. The current situation, marked by rising prices rather than supply shortages, requires a different response. The government is closely monitoring market conditions, particularly in light of recent disruptions in liquefied natural gas (LNG) shipments.

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European Commissioner for Energy Dan Jørgensen reassured that the EU's overall security of supply remains stable, with limited dependence on Qatari LNG imports. However, the International Energy Agency (IEA) has warned that the ongoing geopolitical tensions, particularly the conflict in the Middle East, could have severe implications for global energy markets. The IEA suggests that reducing energy demand through various measures could be a more effective approach than direct price interventions.

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Portugal's response to the energy crisis has drawn comparisons with Spain, which has implemented significant measures, including reducing value-added tax (IVA) on fuel and electricity. Portuguese Foreign Affairs Minister Paulo Rangel acknowledged the need for "structural measures" to support families and businesses if the conflict persists. He expressed concern over the potential economic consequences of the ongoing crisis, which could affect various sectors, including agriculture.

Structural measures to help families and businesses promised if war drags on – Portugal Resident

• "We are getting close to the criteria for declaring an energy crisis." — Maria da Graça Carvalho, Environment and Energy Minister

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• "These measures, these interventions in the market, include the possibility of limiting prices." — António Leitão Amaro, Ministry for the Presidency

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• "The economic consequences of this conflict will have an enormous impact not just in transports, but in the whole chain of production and distribution." — Paulo Rangel, Foreign Affairs Minister

Structural measures to help families and businesses promised if war drags on – Portugal Resident

While the government has indicated that it is far from meeting the EU's thresholds for an energy crisis, the Ministry of Environment and Energy has noted significant price increases in natural gas. This discrepancy highlights the complexity of the situation and the need for ongoing assessment of market conditions.

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