The Minister for Industry, Energy and Tourism, José Manuel Soria, announced today that electricity prices for those on the TUR pricing structure (20 million households and SMEs) were set to rise by between 5% and 7% on April 1st.

In a statement to Antena 3, Soria emphasised that the government had no choice but to increase electricity prices, after the Supreme Court ordered that the allowable annual deficit in power supply pricing had been reached.

The Minister also made it clear that consumers would not bear the whole brunt of the price increases, with public coffers and electricity supply companies also paying their share.  "Otherwise," he explained, electricity prices would have to go up by 40%, and the country is not in a position to stand an increase like that".

He also said that next Friday's meetin go the Council of Ministers would be dealing with concrete proposals to reduce the tariff deficit - the result of the fact that revenue does not cover the costs of running the power supply system.

The TUR tariff, which is renewed every quarter, is the sum of two components: the tolls - which pay the sector's regulated costs (set by the government), and the price of energy itself - which is the result of regular auctions known as Cesur.

Last week's auction for brought about a price drop of between 3.7% and 2.89%, which, after technical adjustments, will translate into a reduction of around 7% in actual electricity costs.

However, the fact that the government did not make sufficient increases in the tolls, that all electricity consumers pay, means that the deficit has to be reduced to the legal limits of 3 billion euros in 2011 and 1.5 billion in 2012.