PRAGUE (Reuters) – The Czech state’s energy price caps will cost a maximum of 200 billion crowns ($8.79 billion) next year, although the final bill is likely to be smaller, the Industry Ministry said in material prepared for the next government meeting.
The government has previously said the expected cost of price ceilings for households and businesses would be around 170 billion crowns.
In documents on the government website to be debated at the first government meeting of 2023, the ministry said the exact cost was not yet clear.
The 200 billion crown estimate assumes a maximum average yearly spot price of no more than 350 euros per megawatt-hour for electricity and 120 euro/MWh for gas.
Around a third of consumption will be covered through purchases on spot markets, said the documents, first reported by Czech Radio.
The government this month approved a measure capping electricity and gas prices for large firms at the same level as prices for households and small firms that are already in place.
The price will be set at 5 crowns ($0.2192) per kilowatt hour of electricity and 2.5 crowns per kilowatt hour of natural gas, excluding value-added tax.
The government is financing the measures from windfall taxes on the energy and banking industries as well as caps on electricity producers’ revenue.
Czech budget deficits have hit records since the COVID-19 pandemic took hold in 2020. At the end of November, lawmakers approved a 2023 budget with a 295 billion crown deficit, down from 375 billion crowns expected in 2022.
($1 = 22.7490 Czech crowns)
(Reporting by Jason Hovet; editing by Barbara Lewis)
