Czech government approves electricity, gas price cap - Reuters

PRAGUE, Sept 12 (Reuters) - The Czech government agreed on Monday to cap electricity and gas prices next year to shield households from soaring prices on markets, Prime Minister Petr Fiala said.

The Czech Republic, like other European nations, has grappled to protect people and companies from power price surges amid cuts in supplies of Russian gas to Europe following Russia's invasion of Ukraine and European sanctions on Moscow.

The Czech government has said it would make its national plan, which is subject to parliamentary approval, work alongside a pan-European solution being prepared by the European Commission and member states.

"We are guaranteeing the price level, everybody will know what they will be paying, and it will be impossible that someone pays multiples of what they pay this year," Fiala told a news conference shown live by news agency CTK.

Fiala said prices for households would be capped at 6 crowns ($0.2476) per kilowatt hour of electricity and 3 crowns for gas, and the changes should be implemented from November deposit payments.

The electricity price is further raised by network services not included in the cap.

He said a solution to deal with high prices for industries would be made public on Wednesday.

When adjusted for taxes, the Czech electricity price cap corresponds to around 200 euros per megawatt hour, a price level mentioned in European Commission proposals for capping price for power generators not using natural gas.

It is far above prices in the past years but also far below Monday's market prices for German 2023 supply which stood at 479 euros .

The government will also guarantee that public sector including hospitals, municipalities or schools would have guaranteed supply at the same prices.

Finance Minister Zbynek Stanjura said the caps would cost the state up to 130 billion crowns ($5.36 billion) next year.

The cap should be financed by a windfall tax the government plans for energy companies, oil refiners, banks and fuel and power traders, which Stanjura said could raise about 70 billion crowns ($2.89 billion) next year.

Further money would be drawn in dividends from state firms and sale of carbon emission allowances, he said.

($1 = 24.2350 Czech crowns)

(This story corrects typo in the headline)

Reporting by Jan Lopatka; editing by Jonathan Oatis and Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

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