FINANCE

Gas subsidy on the cards

As global rates for the fuel soar, gov’t mulls offering similar support to that for electricity

gas-subsidy-on-the-cards

The government is considering the concession of a natural gas subsidy this winter in order to ease the pressure on households from the fuel’s soaring rates, which just before the start of the winter season are twice last year’s.

The Environment and Energy Ministry appears to have examined the idea of a horizontal subsidy for all households that use natural gas up to a certain level of consumption, similar to the subsidy for electricity bills. The funds required in that case are estimated at around 100 million euros for the last quarter of this year, and talks with the Finance Ministry are focused on the possibility of covering the bulk of that amount (some €80 million) through state budget resources.

Another €20 million will come from the Energy Transition Fund that has been set up to subsidize the power rate hikes to the amount of €200 million, instead of the original figure of €150 million. Some €180 million of that will go toward covering the increased needs for the electricity rate subsidy, as the wholesale market rally continues, and the remainder will be used as the start of the gas subsidy funding.

The number and profile of those eligible for the subsidy, as well as its amount per household, will be determined in the coming days, and obviously depends on the resources to be secured for that.

Finance Minister Christos Staikouras did not rule out a government intervention on the issue, referring such an initiative to the momentum of the economy that might support such a move if it is required.

His energy counterpart, Kostas Skrekas, stated, “If we see these conditions persisting beyond December, we will be here to support the Greek people,” referring to the fuel and power hikes and the measures the government has already taken – i.e. the power bill subsidy and the 20% increase in the heating oil subsidy compared to last year.

Skrekas reiterated his estimate that the power bill hikes will be contained to 2-3 euros per month thanks to the application of state measures.