Electricity suppliers facing an extraordinary tax of 90 percent on windfall earnings between August and November argue the energy ministry, engineering the tax, should take into account hefty costs they have been prepared to shoulder as a means of subduing retail price levels for consumers.
The energy ministry, currently finalizing a formula for this tax, insists electricity suppliers have benefited from excessive earnings, especially in September and October, implying suppliers overpriced their electricity during this two-month period.
Suppliers, on the other hand, contend they are forced to purchase electricity in advance to protect themselves against fluctuating prices and are engaging in hedging activities as a result of being required, by law, to announce their retail prices for upcoming months by the 20th of each preceding month.
Hedging, as well as other business costs, should be taken into account before the extraordinary tax is imposed, electricity retailers have stressed.