Czech government approves energy price cap for large firms

The measure will be financed from already approved windfall taxes on the energy and banking industries as well as caps on electricity producers' revenues, he said. News agency CTK said the government expected the price ceilings for all customers to cost up to 170 billion crowns.

The Czech government approved on Wednesday a measure capping electricity and natural gas prices for large firms at the same level as prices for households and small firms that are already in place, Industry Minister Jozef Sikela said.

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, he said, and apply to 80% of past consumption to promote savings. The Czech economy is highly dependent on manufacturing and exports, which primarily go to neighbouring Germany and other European Union states. Companies have called for a price ceiling to avoid being at a disadvantage to foreign competitors enjoying aid such as government programmes in Germany.

Sikela said the aid, which will kick in from the start of 2023, was in line with European competition rules but the plan itself still needed to be notified to the European Commission. Finance Minister Zbynek Stanjura said the aid was capped at the maximum allowed level across the EU at 4 million euros per company.

"It is positive that all entrepreneurs will have the same conditions and it gives us strong hope that companies will survive a tough 2023 in good health and we will keep the lowest unemployment rate in the EU," Stanjura said. The measure will be financed from already approved windfall taxes on the energy and banking industries as well as caps on electricity producers' revenues, he said.

News agency CTK said the government expected the price ceilings for all customers to cost up to 170 billion crowns. ($1 = 22.8090 Czech crowns)

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