Czech government to prepare a solution for companies by mid-December to mitigate energy price rises

By mid-December, the government will prepare a solution for domestic companies in energy-intensive sectors to mitigate the impact of rising energy prices. Finance Minister Zbyněk Stanjura (ODS) and Industry and Trade Minister Jozef Síkela (STAN) agreed on this with representatives of industry and business. The Ministry of Finance announced the agreement in a press release today. It has not yet said what form the support for businesses could take. Regulated energy prices for large customers, including mainly industrial companies, will rise significantly next year.

The Energy Regulatory Office (ERÚ) announced its decision on the regulated component of energy prices for next year on Thursday. Under the decision, the regulated component of electricity prices will rise year on year by 105.5 percent at high voltage and by 190.9 percent at very high voltage. These voltage levels are used mainly by large customers. At low voltage, which applies to households and small businesses, the year-on-year increase will be 66.7 percent. Regulated gas prices will rise year on year by 41.8 percent for large customers and by almost 39 percent for households.

„We recognize that some companies in energy-intensive sectors could face a sharp increase in energy costs next year, so we have decided to heed the calls from representatives of the Czech Chamber of Commerce and the Confederation of Industry and Transport and find a solution for these companies within about two weeks,“ Stanjura said.

„If we reach an agreement with business associations—and I believe we are on the right track—I will be happy to prepare it quickly,“ Síkela said. He said the approved measure would also make it possible to provide electricity price support in a more targeted way and without the need for notification to the European Commission.

Representatives of industry and business welcomed the government’s commitment. „It is important to us that the government understands that high charges would undermine the competitiveness of many companies in the Czech Republic. The current ERÚ price decision, for example, with an almost threefold year-on-year increase in the regulated component of electricity prices at very high voltage, is unacceptable to us,“ said Jan Rafaj, president of the Confederation of Industry and Transport of the Czech Republic.

Zdeněk Zajíček, head of the Czech Chamber of Commerce, welcomed the fact that ERÚ had slightly reduced the increase in the regulated component in its price decision compared with its original proposal. Even so, he said, the increase is so large that it could put energy-intensive businesses in particular in serious difficulty. Zajíček also warned that companies would not be helped by passing rising energy costs on to product prices, as this would weaken their competitiveness.

„It is also important to note that, compared with other European Union countries, Czechia has a more developed industrial base, and domestic industry is also much more energy-intensive. Its energy use per unit of GDP is roughly twice the EU average. Every increase in energy prices therefore affects Czech companies much more than companies in other countries,“ Zajíček noted.

Another outcome of the talks, according to the ministry, is an agreement to hold regular meetings next year as well, where various systemic solutions will be discussed to prevent unpredictable increases in the regulated component of energy prices in the future.