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Greece Offers Power Subsidy to Households as Energy Price Soars

Greece
Greek households will be subsidized to cope with rising power prices. Photo: Athens at Night by George Koronaios/Public Domain

Greece announced on Friday a series of measures that would offer households subsidies to cope with soaring energy prices.

“In this unprecedented energy crisis, we will not leave anyone unprotected,” said Environment and Energy Minister Costas Skrekas at a joint press conference with Finance Minister Christos Staikouras.

Skrekas said that the government has created an efficient protection shield for society, along with a permanent damping mechanism against energy price increases.

These measures include doubling the amount of subsidy for electric power, additional reductions for households included in the social tariff for power and commercial discounts to electricity and natural gas by PPC and DEPA Commerce.

More specifically, the government announced a doubling of a subsidy of electricity bills in the period from September to December, from 30 euros to 60 euros per MWh for consumption of up to 300 kWh per month.

In practical terms, the subsidy will be raised from 9 to 18 euros per month. PPC will offer additional discounts for electricity consumption between 300-600 kWh per month, beyond a 30 percent discount offered since August, while the Ministry recommended other alternative electricity suppliers make similar moves.

For households included in the social tariff billing system the subsidy is set at 80 euros per MWh, or 24 euros per month. DEPA Commerce will offer a 15 percent discount to suppliers to be rolled over to household consumers.

The government is also expanding the income criteria for the heating allowance (heating oil, natural gas, LPG, pellets, firewood) to include more than 1 million households.

The allowance will be increased by 36 percent for households without children to 68% for households with three children. The average increase of the subsidy for a family of four is 59 percent.

Skrekas said the subsidy system will be re-evaluated after 1-2 months to make any necessary adjustments.

Russia reduces gas supplies to Europe

The Russian firm Gazprom, which is majority owned by the Russian state, is continuing to reduce gas supplies to Europe via Belarus, potentially aggravating tense market conditions. The price of gas has all but doubled in the last few weeks, frustrating Greek and EU consumers.

Exports to the EU via Belarus plummeted from 112 million cubic meters (mcm) on September 26 to just 30mcm on Sunday, October 3, according to Gazprom’s latest data. That amounts to a staggering 70% drop.

Greece wants European response to energy price spike

Earlier in the week, Greece called on the European Union to create a special mechanism to protect consumers from steep gas price spikes across the bloc.

In a joint letter to the head of the eurozone’s finance ministers, Paschal Donohoe and Greek finance and energy ministers called on the European Commission to consider setting up an EU-wide fund to help households tackle rising energy prices.

“The unprecedented spike in gas prices, and by extension in electricity prices, is a major challenge for all EU Member States that cannot be dealt with, solely at a national level. This is a pan-European problem and requires immediate action which should jointly be taken at EU level,” the letter says.

 

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