Filenews 29 June 2023 - by Eleftheria Paizanou
Far fewer consumers will benefit by the end of September from the subsidy on the price of electricity from the state, as decided yesterday by the Council of Ministers, while everyone will pay more expensive fuel from Saturday.
Due to the impact of electricity and fuel on the prices of other products and services, it is very likely that yesterday's development will lead to a new wave of prices in the market in the coming period.
On 30 June, the two measures to support consumers from prolonged prices, which have been in place for the past 16 months, expire. The Government considered that the data did not justify the continuation of the reduction of excise duty on fuel, while the electricity subsidy would be provided only to the beneficiaries of the special tariff 08.
In particular, the electricity subsidy will focus only on vulnerable households and farmers who use pumping stations for their plantations. Vulnerable households include EIO recipients, disabled people, people unable to work, large families, single parents, people receiving disability and disability pensions, as well as the unemployed.
Essentially, these are consumers who fall under EAC tariff 08, for which beneficiaries are 34 thousand. consumers, however only 18 thousand. They are normally included in the tariff, which offers on a permanent basis a reduced electricity charge of about 20%.
The budgetary cost of the electricity price subsidy for the next two months is reduced to €2.5 million, compared to €18 – €20 million. from 1 May to the end of June.
More expensive electricity
Following yesterday's decision, from the next two months, EAC bills for the vast majority of consumers will be increased. According to EAC, for an indicative total bill of a household consumer with consumption of 800 kWh per two months, and measured in June 2023, the charge is estimated at €281,34 without including the relevant sponsorship of the Ministry of Finance.
This amount is increased by 32% from the corresponding indicative bill which includes the relevant sponsorship and is estimated at €212,64. As EAC points out, the calculation was made with the current tariffs and energy costs applicable for June. Therefore, for small and medium-sized households (in terms of electricity consumption) the cost from yesterday's decision is estimated at around €70 per two months, but the higher the consumption (given the use of air conditioners in the coming months) the additional cost will be greater.
More expensive and fuel
Yesterday, the Government also put an end to the reduction of excise duty on fuel, a measure that was applied from March 8, 2022. Therefore, from Saturday 1 July the prices of 95 and 98 octane gasoline, as well as diesel, will increase by 8.32 cents per liter and heating oil by 6.2 cents per liter.
The opposition disagrees with the decision
DISY spokesman Onoufrios Koullas said DISY had proposed extending the measures for three months due to the summer season. As he said, the proposal for a three-month extension was within the budgetary possibilities. "The economy is not at risk from one-off and short-lived measures that support hundreds of thousands of households and tens of thousands of businesses. However, it is at risk from decisions that inflate permanent inelastic spending, such as the government's decision to release almost 2,000 new hires in the public sector, approved by the co-governing parties together with AKEL," he added.
On behalf of AKEL, Haris Polycarpou said that the Christodoulides government is leaving households and businesses prey to the wave of high prices. "Without an alternative plan to support society, it is proceeding to end the subsidy measures on electricity and fuel," he said. He pointed out that government decisions confirm the absence of planning and planning.
Finance Minister Makis Keravnos, responding to the opposition's criticism, said that "I think we are in a better position to know the state of public finances, which are in good shape and we will not allow in any way to have any concern about fiscal stability."
