Czech Families to Face 15% Increase in Gas Costs: What You Need to Know About Upcoming Tax Changes

According to Kovanda, Czechs are now facing higher gas distribution costs, which will be greatly felt by families who will pay up to 15% more for regulated taxes from next year. This increase is to cover the operating costs of half-empty gas pipelines and the maintenance of the infrastructure, which the state bought with a debt exceeding 34 billion crowns.

“For example, a household in a family house with gas heating and consumption of 25 to 45 megawatt-hours of gas per year pays ​​​​​​272.64 crowns per megawatt-hour to Pražská plynárenská this year, next year it should be 313.27 crowns per megawatt-hour. ,” Kovanda calculates a fifteen percent increase in prices for taxes. “The fixed tax for such housing will then increase from 318.89 this year to 366.55 crowns, ie also about fifteen percent,” said the economist.

Kovanda suggests that the government hoped that these costs would be covered by revenue from transit fees for transporting gas to Slovakia and Austria. But this plan turned out to be ineffective because, for example, Austria is starting to import gas through Italy, and Germany and Slovakia have access to gas supplies through Poland and Lithuania or from Azerbaijan. Kovanda refers to this development by saying that “Czechs overcalculated” because the original assumption of profit from transfer taxes did not result in real income in the end.

Kovanda further criticizes the fact that the state bought Net4Gas at a time when the company stopped being profitable – mainly because of the impact of the Russian invasion of Ukraine and the sabotage of the Nord Stream gas pipeline.

Czechs have made a mistake and from next year they will pay more for half-empty gas pipes, regulated payments for gas will increase up to 15 percent according to the official proposal. First, they wanted to pay for the transfer of gas to Slovakia and Austria

Starting next year, regulated payments for Czechs will increase for…

— Lukáš Kovanda (@LukasKovanda) November 12, 2024

In the following post on X, Kovanda compared the situation in the Czech Republic before and after the war in Ukraine started. He pointed to the change when the transit of Russian gas through the Czech territory created income, but now it no longer does.

“Russian gas flowed to the Czech Republic, but it also flowed further, across the border, so the Germans and Canadians made money from transporting it through the Czech Republic,” he recalled, as it was before February 2022, when Russia invaded Ukraine. “Now, Russian gas is still flowing into the Czech Republic, but it’s not flowing anymore, and so no one makes money on it, and an ordinary Czech has to make up for the resulting deficit,” said Kovanda. In short, gas pipelines no longer generate profit from transit and Czech customers now have to bear the deficit from operations.

Before the war:
Russian gas flowed into the Czech Republic, but it also flowed beyond the borders, so the Germans and Canadians made money from its transportation through the Czech Republic.

Now:
Russian gas still flows to the Czech Republic, but it doesn’t flow anymore, so nobody makes money on its transport and the average Czech has to make up for the resulting shortage.

— Lukáš Kovanda (@LukasKovanda) November 12, 2024