Czech government agrees on price for electricity and gas cap

On September 12, 2022, the Czech government agreed on the maximum price of electricity for households. (papazachariasa/
By Kristýna Čtvrtlíková
3 Min Read

The Czech government has agreed on a maximum price of electricity for households, with ministers setting the ceiling at 6 korunas (€0.24) per kWh for electricity and 3 korunas (€0.12) for gas. Prices will apply to households and businesses from November, according to an announcement on Monday at a press conference after an extraordinary meeting of the government.

Prime Minister Petr Fiala stated that the maximum energy prices approved by the government on Monday would apply to households and public service providers. According to him, everyone will feel the decrease in payments in November. Fiala added that the government is also preparing a solution for industry.

Interior Minister Vít Rakušan stated that including the regulated component, the total price of electricity would be between 7-9 korunas (€0.29 to €0.37) per kilowatt-hour. According to him, a household that uses electricity for heating should save up to 111,000 korunas (€4,526) per year.

Minister of Finance Zbyněk Stanjura estimated the budgetary impact of capping the price of electricity and gas, as decided by the government, at a maximum of 130 billion korunas (€5.3 billion). The state is mobilizing revenues from all state-owned companies, a tax on windfall profits, and revenues from emission allowances for energy ceilings, Stanjura said.

Minister of Labor and Social Affairs Marian Jurečka said on Monday that the government’s decision is “a clear step to help households and companies manage the situation.”

“The social system and the adjustments we made to it guarantee that, in this situation, we can handle both the winter and the next months. There will be no threat of closing schools and social facilities such as hospitals,” he added.

The wholesale price of electricity ended at €496 per MWh on Friday after it rose to €984 at the end of the summer holiday season.

Finance Minister Zbyňek Stanjura has previously said that for the measure to work, it will be necessary to enact an obligation for energy producers to sell part of their production, about 10 to 20 percent, to the state or a state retailer.

The relevant amendment to the Energy Act, which will allow prices to be capped in the event of an extraordinary market situation, still needs to be approved by the Chamber of Deputies and the Senate.

After the prices are capped, energy suppliers must recalculate payments to match the new maximum prices.

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