Greek price ceiling on electricity

As coordinated measures at European level aren’t gaining traction, gov’t making its own moves

Greek price ceiling on electricity

The government is to introduce a price ceiling on the wholesale electricity market as the request for coordinated measures at the European level, which was reformulated on Monday at the Extraordinary Council of Energy Ministers by Energy Minister Kostas Skrekas, did not appear to gain traction.

Skrekas reiterated the proposals of the Greek government for imposing a ceiling on the wholesale energy markets and the establishment of a European Solidarity Mechanism to offset the effects of the international energy crisis and to stabilize prices at affordable levels.

“Now it is more necessary than ever to agree on a collective strategy with targeted measures to support society,” he said, addressing his counterparts, while noting the need for a realistic and carefully planned strategy to phase out Russian fossil fuels that would not jeopardize Europe’s security of gas supplies.

Not expecting any decisive decision at the summit to this end, the government appears ready to proceed with the measure of imposing a ceiling on the wholesale market, in order to facilitate the payment of electricity bills for all consumers who are increasingly struggling to pay them on time. 

In recent months there has been support from the government, which mainly gave to those who consumed up to 300 kWh in their main residence and saw very small increases. At the same time, there was support for businesses. However, those who consumed more saw much larger increases. From now on, with the plan announced by the prime minister, there will be a very decisive intervention, very substantial help and support to those who had higher consumption, horizontally, regardless of income criteria, which will result in drastically reduced bills for “a long time horizon,” said government spokesman Giannis Oikonomou.

The unrelenting burden on consumers from the prolonged energy crisis is reflected in the official Eurostat data. Tellingly, Greece recorded the seventh highest price hike in the second half of 2021 with a rate of 20.3%, significantly higher than the European average of 12%. 

Greek companies consuming 500-2,500 MWh per year had paid the highest electricity prices in Europe, at 0.2238 euros per kilowatt hour, when the average price in the EU was 0.1445 euros. 

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