Energy shock could hit again. Czech government is preparing an emergency plan

The government will discuss a plan on Monday to address a possible further rise in energy prices. Industry and Trade Minister Karel Havlíček (ANO) said so on Czech Television’s Sunday Debate today. According to him, the plan envisages reducing regulated energy prices for households and self-employed people, and capping prices for producers. Havlíček said the government would activate the plan if energy prices for consumers exceeded a certain level, but he did not specify what that level would be.

Energy prices have been rising since this spring as a result of the conflict in the Middle East. Gas and electricity prices have risen by tens of percent since March. Domestic suppliers are gradually reflecting the increases in their price lists.

"We will prepare a solution to reduce energy prices if they continue to rise," Havlíček said today.

He wants to focus on both end-user prices and prices charged directly by producers. "We will reduce end-user prices for households and self-employed people through the regulated component. At the same time, we will also cap prices for producers," Havlíček said. He will present the plan to the government on Monday.

If the government approves the plan, that will not mean prices are immediately reduced or capped. Havlíček said the cabinet would activate the plan only if energy prices exceeded a level agreed by the government. "It will be designed as a general framework so that we can respond immediately when a critical situation arises and end-user prices exceed a certain level," Havlíček said.

In recent months, the government has already responded to rising fuel prices. Since October, the Finance Ministry has set maximum prices for diesel and petrol daily, while the government has also capped traders’ margins and cut the excise duty on diesel.

In September, the government also approved an extraordinary tax on increased refinery margins. It will apply this year and next year. The new tax will apply to companies with total annual revenues of at least two billion crowns and annual revenues from refining activities of at least 50 million crowns. It will amount to 50 percent of the increase in gross margin compared with 2025. The measure will primarily affect Orlen Unipetrol. The proposal is currently before the Chamber of Deputies.

Havlíček today acknowledged that the government coalition would discuss the possibility of introducing another sectoral tax. The coalition council could discuss it on Monday. "We are considering all options," he said. He did not give any specific proposals.

Energy prices began rising sharply after the conflict in the Middle East began on the last day of February. The impact has been most pronounced for fuels and gas. In recent days, the wholesale price of natural gas for the European market briefly reached 100 euros per megawatt-hour (MWh) for the first time since December 2022. At the start of the year, its price was around 30 euros per MWh. In Central Europe, gas also serves as the so-called marginal source in electricity generation. As gas prices rise, electricity prices on the market are also gradually increasing.