Starting tomorrow, ČEZ will raise prices again. The largest domestic supplier of electricity to households whose fixation ends will raise the price from August 1, on all tariffs – most often by about 10 percent. At the same time, he also increased the price for the period from July 1. Households are in for a price shock in the fall, inflation may reach the level of 20 percent.
ČEZ’s pricing policy sets the tone for the entire market, so it means that all other domestic suppliers will also spiral in price both electricity and gas. After all, the Prague electricity company PRE is also raising prices from tomorrow.
The price of electricity on the stock exchange increased sixfold year-on-year, therefore CEZ and other suppliers must gradually reflect this huge increase in prices for all end customers. Therefore, CEZ’s August price increase is definitely not the last this year. And another spiraling rise in prices will occur next year.
The energy crisis is also an opportunity. For example, for the development of small nuclear reactors
Small nuclear reactors could be operational in just a few years, potential manufacturers say. It will therefore not eliminate the current uncertainties surrounding energy shortages, but could contribute to a more certain composition of the future energy mix. Czech companies are also involved in the development. However, the creators will still have to solve significant financial and administrative problems.
It cannot be ruled out that ČEZ will take a “break” with price increases in September, because municipal elections are held at the end of September. This could lead to a certain agreement between the government and ČEZ that the company would not raise prices again until October 1 or November 1 – that is, after the elections. This would explain the current two price hikes in a row. In addition, in the middle of the holidays, people will be on vacation, the media is in “cucumber season”, so there might not be a significant social debate around the price hike – so unpleasant from the point of view of government politicians.
Fial’s government apparently came out in favor of ČEZ when it surprisingly did not agree to a higher dividend at the June general meeting. In the end, it amounts to only 48 crowns per share, which means income for the state of roughly 18 billion crowns. If the state were to say that the dividend would be tens of crowns higher per share, its total income from it could exceed, for example, 30 billion crowns. So it would cover half of the 66 billion in aid, i.e. the savings tariff, which the state is planning this year and next year to help people with energy payments.
An unusual term
In addition, the dividend will unexpectedly be paid only in November, when ČEZ will be in a better position in terms of its own cash. So, even in this case, the government actually came to the company’s aid, because as its largest, 70 percent owner, it could ask for money at an earlier, standard payment date. In return for the government’s benevolence, ČEZ could promise not to raise prices in the election month.
In the autumn, we have to expect up to more than 100 percent year-on-year growth in electricity prices. Although the government analysis prepared at the request of the Ministry of Industry and Trade expects “only” an 86 percent increase in prices, the situation on the European energy market is becoming more dire by the day. This is reflected in the increase in gas and electricity exchange prices.
Now, more acutely than at the time of the preparation of the mentioned government analysis, there is a threat that Russia will completely disconnect Europe from its gas by winter. This would lead to a further noticeable increase in electricity prices in the EU, as the energy markets are interconnected. In such a case, overall inflation in the Czech Republic would attack or even exceed the level of twenty percent.
Dalibor Martínek: Expensive energy? The government has half-baked solutions. Higher taxes won’t solve anything
Vít Rakušan, the old head of the Starostů, comes up with the idea of higher taxation of energy companies. We could have had straight socialists in the government, one thinks. But the Austrian is not alone in his ideas on how to deal with the approaching energy poverty. The Minister of Industry for the same party, Jozef Síkela, has been developing a kind of cheap energy tariff for many months. We still don’t know much about him. The previous government of Andrej Babiš, on the other hand, relieved people by waiving the value added tax on energy.
CEZ is leaving Turkey. He wants to be greener
The ČEZ energy group has begun its withdrawal from Turkey. The transaction still needs to be approved by the Turkish authorities, the settlement is also conditional on arranging bank financing. The sale of a fifty percent stake in Akcez is part of CEZ’s strategic plan to divest part of its assets in selected markets and focus on decarbonizing its production portfolio, according to the press release.
Gazprom cut Latvia off from gas. It was paid in euros instead of rubles
The Russian company Gazprom suspended natural gas supplies to Latvia on Saturday morning. The Baltic Republic did not pay for the raw material in the required rubles.
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