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Czech Parliament approves cap on electricity and gas prices

The Czech Republic’s Parliament approved an amendment to the Energy Act to impose a cap on electricity and gas prices in a bid to support households and small businesses.

Responding to the rise in energy prices, the government wants to limit the price of electricity to 6 korunas (0,24 euros) per kilowatt hour for electricity and three korunas (0,12 euros) per kilowatt hour for gas from November.

The state will bear the difference between the cap and the actual price, which will amount to 130 billion korunas (5.3 billion euros), according to preliminary estimates.

The House of Representatives voted on the legislation in an accelerated mode, now it must be approved by the Senate and signed by Czech President Milos Zeman before coming into force. The government will have to issue a regulation setting out the maximum price, the scope of the measures and eligible customers.

The amendment also sets out that in extraordinary market situations, the government will be able to prohibit, the trading of electricity and gas on stock exchanges as a last resort.

The House of Representatives also approved the extension of the reduced rate of consumption tax for diesel fuel until the end of next year to help the competitiveness of local fleets.

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