Government seeking to tame energy prices

Among the multifaceted effects of the pandemic the government is struggling with, spiking energy prices are far from the least of its concerns.

Prime Minister Kyriakos Mitsotakis on Wednesday called his Russian counterpart, Mikhail Mishustin, and energy was at the forefront of the discussion. Mitsotakis invoked a possible bilateral agreement to cut the price of natural gas imported from Russia. It is not at the moment known what Russia’s position is.

Greece fills about half of its demand for natural gas with imports from Russia. Natural gas from Azerbaijan and liquefied natural gas (LNG) imported from Algeria, Egypt and Qatar are also major sources.

More than half of the natural gas consumed in Greece is used by industry, especially the electricity-generating sector. This makes the recent rises in natural gas prices affect almost every sector and is reflected as widely as in the prices of basic grocery goods or household power consumption.

The price of a megawatt-hour of electricity has risen 857.62% compared to last year, that is, more than nine times over. And while power providers have been made to provide large discounts to households, this severely impacts their bottom line. Given that we are still at the start of winter, the government is looking for ways to tame energy-induced inflation. 

While talks at the highest political level are ongoing, and Mitsotakis having raised the matter when he met with Russian President Vladimir Putin at the Black Sea resort of Sochi a couple of weeks ago, DEPA Commercial, the main gas importer, is already in talks with Greece’s main supplier, Russia’s Gazprom, over a 2022 supply contract at the best possible price.

Mitsotakis and Mishustin also discussed closer cooperation in the tourism sector and the implementation of a common action program for 2022-24 agreed with Putin.

Also yesterday, Mitsotakis met in his office with the United Arab Emirates’ Minister of Industry and Advanced Technology Dr Sultan Ahmed Al Jaber to discuss investment and economic cooperation prospects.

Soon after New Year’s, the government will moreover have to deal with other effects of the pandemic that also impact the economy. Officials are already considering shorter opening hours for catering and more work from home, while trying to avoid any sort of lockdown, which some experts consider inevitable.