Finally, the latest meeting of the Council Ministers approved a decision to oblige Gas Natural Fenosa and Endesa, as the dominant gas operators (each holding a market share in excess of 10%), to act as market makers in MIGBAS.

Background

On 19 October, Spain's Markets and Competition Commission (CNMC) published a report on the functioning of the organised gas market (MIBGAS) for 2016 (INF/DE/183/17). Among the measures to boost liquidity and thus bring MIBGAS into line with other European markets, the Spanish Government has approved a proposal to make it mandatory for the dominant operators to act as market makers, following the parameters proposed by the CNMC in March 2017.

In January of this year, Spain's Minister for Energy, Tourism and Digital Agenda announced that he would make it mandatory for Gas Natural Fenosa and Endesa to operate in regulated manner in the gas market and, against a backdrop of electricity price increases, to lower their prices with the aim of ensuring better offers and prices in the natural gas market.

The Council of Ministers' decision was approved on the basis of additional provision thirty-four of the Spanish Hydrocarbons Sector Law 34/1998, of 7 October, related to the liquidity of the organised gas market, according to which "the Government may oblige natural gas traders that are dominant operators […] to submit offers for the purchase and sale of a specific volume of gas in that market, plus a differential".

This obligation means that the operators will have to continuously submit offers for purchase and sale on MIBGAS. As such, Gas Natural Fenosa and Endesa (in this latter case, mandatory) join AXPO Iberia, which, according to the Resolution of the Directorate General of Energy Policy and Mines dated 30 June 2017, is already a market maker in MIBGAS until 31 December 2017. With this measure, it is expected that there will be a significant boost in liquidity in MIGBAS, which will ensure thatr operators will sufficient gas to cover their needs at any time.

It is expected that this increased liquidity will reduce market volatility and will dampen price spikes in the event of low supply.

The Secretariat of State for Energy will approve a resolution containing the technical and economic conditions that implement this obligation on the basis of the CNMC's report.