Slovak government plans energy price cap, tying it to tough budget vote

Slovakia will cap energy prices for companies in the first quarter of the next year to ease the impact of soaring bills, Prime Minister Eduard Heger said on Monday as he aims to shore up the minority government’s chances of pushing through a 2023 budget.

The government will set a cap at 199 euros ($195.42) per megawatt hour of electricity and 99 euros for gas, with the state covering 80% of costs above these levels, Heger told a televised news conference.

“We will cover almost the entire company sector, with only those extremely energy-consuming left, to be treated individually by the Economy Ministry,” Heger said.

“The help is linked to 2023 state budget approval. Therefore I think it is worth it for every lawmaker to remove their political jersey, and to approve it,” he added.

Heger’s government fell into a minority in parliament in September after a junior coalition party quit in a row with Finance Minister Igor Matovic, who leads the top ruling party.

The government is now facing a tough vote for its 2023 budget plans as the opposition throws up obstacles and has sought early elections, which Heger has rejected.

The 2023 budget draft includes 3.5 billion euros worth of support measures, including the power price cap for companies. The cap should cost around 500 million euros for the first quarter, Matovic said on Monday.

Slovakia is facing soaring energy bills like the rest of Europe after Russia’s invasion of Ukraine and reduced Russian gas deliveries have sent electricity prices sharply higher.

European Union leaders last week did not find a common approach to capping gas prices.

($1 = 1.0183 euros)