Power bill subsidies slashed
The government has significantly reduced the level of electricity bill subsidization for February, given the considerable decline in international natural gas rates, which have slashed the cost of electricity production.
On Monday Energy Minister Kostas Skrekas announced that the subsidy on household electricity tariffs for February, for 90% of consumption (up to 500 KWh per month), is set at 4 cents per kilowatt-hour, or 40 euros per megawatt-hour, down from €330/MWh in January.
This means that the sum of state subsidies for the year's second month is reduced to just €95 million, from €840 million in January.
As the minister pointed out, this is a period when natural gas prices are falling steeply globally, which is also a result of the adoption of the European mechanism for a cap on natural gas prices. “Today, we are in a period of drastic de-escalation of global natural gas prices,” Skrekas said in an address announcing the measures. “The crisis during this period has eased, but it is not over,” he stressed, adding that the government has pledged to stand by consumers as long as the volatility lasts.
Skrekas attributed the fall in gas prices to a cap agreed by EU countries in December to avoid the record-high prices Europe faced last year after Russia slashed gas deliveries.
The policy was agreed following a drawn-out debate between more than 15 pro-cap countries, including Greece, and will come into effect on February 15 if benchmark Title Transfer Facility (TTF) gas hub prices spike.
“This development did not come about by chance, nor unaided. I recall that since March 2022, Prime Minister Kyriakos Mitsotakis was the first to propose the imposition of a realistic cap on natural gas prices to limit speculation in international markets,” he stressed.
The government has spent around 8.2 billion euros so far on helping households and businesses pay their electricity, gas and heating fuel bills, which soared last year following a spike in energy prices after Russia invaded Ukraine.
Gas prices have retreated since mid-December amid unusually warm weather and full EU gas storage facilities.