Suppliers to increase tariffs in response to fixed-charge limit

The country’s electricity suppliers are expected to revise upwards their basic tariffs after being subject to a five-euro price cap on fixed charges.

In practical terms, suppliers who, for example, have set a tariff price of 50 cents per KWh and a fixed charge of 20 euros, which will now need to be reduced to 5 euros, will consider increasing their tariffs to 52 cents per KWh in order to offset the loss resulting from the price cap, the latest in a series of energy-crisis measures introduced by the government.

If the country’s electricity suppliers do decide to respond to the latest measure by increasing tariff levels, the government’s price-cap initiative on fixed charges could prove futile.

In the lead-up, electricity suppliers opted to increase their fixed charges to keep their tariffs – the competitive aspect of electricity bills – as low as possible after the government implemented price caps in the wholesale electricity market and abolished wholesale-price adjustment clauses in electricity bills, amongst other measures.

Suppliers are expected to announce their tariffs for next month either today or Monday.