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Electricity Prices Cut in Half: Consumers to Benefit Soon, Says Minister Síkela

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Not even a whole year has passed and electricity prices are at half. While last April one megawatt-hour cost 161 euros on the stock exchange, at the end of February it dropped almost to 70 euros. According to the Minister of Industry and Trade, Jozef Síkela, the positive trend will soon be felt by consumers as well.

“Distributors are constantly coming up with new tariffs. Prices are already more than 30% below the price ceilings,” said Minister Jozef Síkela (STAN) on Czech television. “It is a question of when the competition will force individual distributors to write the positive development of wholesale prices into the final invoices,” he added, adding that it will still be this year.

The minister believes that the right time is coming to fix the price of energy. “On the contrary, I would recommend that those whose tariff ends take a very good look at the market and definitely go for some kind of fixation,” said the minister. Jan Rafaj, president of the Union of Industry and Transport, shares the same opinion: “Now is a good time to consider fixation,” he recommended in the Otázky Václav Moravec program on CT.

“I would not recommend fixation for a long time,” countered Karel Havlíček, shadow minister of industry of the ANO movement. Despite the significant drop in the price of electricity on the markets, we do not yet see a drop in tariffs, and customers will only really feel the discount next year, Havlíček thinks.

“Spot prices on the markets are falling, but they are not falling for customers. The ČEZ basic tariff in 2021, when electricity on the markets cost 70 euros, today it costs the same, was 4.80 CZK per kWh. Today, eight crowns and 12 pennies are paid in the same tariff,” said Havlíček, adding that the distributors need to resell the energy they bought at higher prices last year.

Havlíček, who himself served as industry minister in the previous government, also criticized the cabinet for making the regulated component of energy more expensive for consumers by passing on the costs of renewable sources to them. “The government has decided to transfer it in the amount of 60 billion crowns, and the Energy Regulatory Office (Energy Regulatory Office, editor’s note) will then calculate according to a certain key how much will go to residents and how much to businesses.”

“The government only reduced the massive subsidies that it sent to companies and consumers in 2023,” Síkela rejected the criticism, reminding that the government waived the fee for renewable sources to people in response to energy price increases.

Síkela also argued for the return of the RES fee to the invoices due to the higher costs of the state for the development of the energy network due to “green sources”. “Last year, 27 billion went into the development of the network. Next year, it will be another eight billion more,” the minister calculated. According to the minister, there will be no further price hikes at the turn of this year and next year.

According to Eurostat’s February data, Czechs pay the highest regulated prices in the entire EU. From December 2023 to January, they increased by 5.6% month-on-month. At the same time, the average resident of the Union experienced a 1.6% rise in prices at the turn of the year.

If we look at energy prices in the EU in general, not just the regulated component, the Czech Republic is the third most expensive country after Spain and the Netherlands at the turn of the year. Electricity, gas, solid fuels and thermal energy rose in price by 7.3% month-on-month in January, according to fresh figures from Eurostat.

According to Jan Rafaj, the transfer of costs for renewable resources into prices for consumers has a negative effect on the economic growth of the Czech Republic. “It causes economic stagnation. We have to decide if we want to kick the economy. The Czech entrepreneur has worse conditions,” said a representative of the industry in ČT.

2024-03-03 13:19:36
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