Electricity bill subsidies to be lower as wholesale prices ease

The subsidy provided to household electricity bills is expected to range between €10-15 per megawatt-hour in August, the Ministry of Environment and Energy estimates.

The estimate is on the low side and reflect the drop in wholesale electricity prices to €106.02/MWh Tuesday and €104.26/MWh Wednesday from as high as €137.27/MWh last week. This means the government will spend less than expected, or feared, to subsidize electricity bills.

The final amount of the subsidy on so-called “green” electricity rates will be announced on Friday, August 2, that is, one day after the providers announce their own retail prices.

As has already been announced, the subsidies will be financed through a tax on electricity generation from natural gas.

Talking about the tax at Tuesday’s cabinet meeting, Prime Minister Kyriakos Mitsotakis said that “whenever there are distortions in the market, we will intervene for the benefit of consumers.”

Inflation has been a major source of discontent in the past couple of years and the government wants to be seen as doing everything it can to lower it or even see it turn negative in certain categories of consumer goods, such as foods.