On Monday, Czech Prime Minister Petr Fiala announced that the Czech Republic will introduce a price cap on residential electricity and gas consumption from November to protect households from soaring energy prices.
Under the decree, electricity prices will be capped at 6 CZK (EUR 0.24) per kilowatt-hour and gas at 3 CZK (EUR 0.12). The government is also preparing to reduce the burden on industrial users, with the solution reportedly to be published on Wednesday.
According to Finance Minister Zbynek Stanjura, the cost of the price restrictions is expected to be CZK 130 billion (EUR 5.3 billion). Stanjura also referred to the extra profit tax, which the Czech government has also introduced, just like Hungary.
With a planned tax on windfall profits in certain sectors of the economy, the Czech government expects to raise CZK 70 billion (EUR 2.8 billion) next year.
The Czech Republic is not the first country to introduce a price cap to combat soaring prices. In Hungary, another member of the Visegrad Group, a price cap has been in place for several months on fuel prices, which stand at 480 forints (EUR 1.2).
In the meantime, the Hungarian government is trying to maintain the reduction in utility costs, which currently apply up to average consumption, even in the current energy crisis. There is also relief for those who consume above the average consumption, they have to pay the so-called residential market price, which is well below the actual market price.
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