Spain will extend a tax cut on electricity bills until May 1, 2022 in a bid to help consumers cope with rising energy prices, Budget minister Maria Jesus Montero said on Wednesday. European electricity and gas prices have rocketed this year as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic. "We are going to extend the reduction of taxes on electricity bills during the first four months of next year because taxation for this government is an instrument that must allow us to preserve the welfare state and accompany the economic situation", Montero told lawmakers. She did not specify which tax cuts will be extended. In June, Spain cut the sales tax on electricity bills to 10% from 21% until the end of the year and suspended a 7% tax on the value of electricity generation, which utilities ultimately pass on to the retail market price. The rising prices of electricity have come on the top of EU agenda. The European Commission on Wednesday proposed rules allowing EU countries to jointly buy strategic reserves of gas, under plans that would also bolster gas storage and aim to add more low-carbon gases to the network. read more European Union countries including Spain, Greece and Romania have called for joint gas buying, which they say would help shore up supplies. Reporting by Emma Pinedo, editing by Inti Landauro and Giles Elgood Our Standards: The Thomson Reuters Trust Principles.