The government faces a tough fiscal battle to keep energy bill costs within the reach of consumers, a continuously growing challenge given the persistent rise in the price of natural gas, a key source for electricity generation, as a result of escalated tensions between the West and Russia over the latter’s war in Ukraine.
The continual rise in energy prices threatens to derail the government’s support plan for energy consumers and producers.
Last Friday, the price of wholesale natural gas ended trading just under 150 euros per MWh. Its cost rose by 70 percent between June 1 and July 1, from 87 euros per MWh to 147.5 euros per MWh.
The government is searching for fiscal leeway to limit energy prices, compensate producers and subsidize consumer energy bills.
As part of the effort, energy minister Kostas Skrekas has pledged to raise close to 6 billion euros over the next 12 months by taxing windfall profits of producers. This sum is expected to be boosted further by contributions from the Emissions Trading System (ETS), budget and European funding programs.
It remains unclear if the overall amount to be raised will be enough. The cost of electricity and gas bill subsidies in 2022 could exceed 6 billion euros. The cost in the first half of the year reached 2.4 billion euros, while 3.6 billion euros have been budgeted for the second half of the year.