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December 1st, 2008
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Chamber urges gas cost statutes

Industry concerns sparked over plans to hike household prices

September 3rd, 2008 issue

By Bibiána Duhárová

Staff Writer
Alarmed by a series of price hikes by the largest providers on the market, the Economic Chamber is calling for the regulation of natural gas prices.
In a Sept. 1 announcement, the chamber’s representatives voiced concern regarding the economic impact of natural gas costs, which according to the chamber seem to be growing at an uncontrollably fast pace.
“Czech firms are harshly influenced by growing energy supply expenses, which seriously undercut the competitive advantage of our companies at home and abroad,” explained Pavel Bartoš, the chamber’s vice president.
The statement was prompted by an earlier announcement by energy companies E.ON, RWE and Pražská plynárenská to raise natural gas prices 5 percent to 10 percent as of Oct. 1.
Households will experience the sharpest rise in costs.
Customers who use RWE as their main energy supplier will pay up to 10.4 percent more for gas. Prague-based Pražská plynárenská will raise gas prices 9.3 percent and global energy distributor E.ON, which operates in the southern part of Czech Republic, will raise prices 5 percent.
The planned hike is not the first energy price mark-up on the local market this year. Since January, energy prices have risen 30 percent.
E.ON alone has increased gas prices an average of 15 percent since July. “The price increase was … caused by high prices of oil derivatives and coal in the preceding six months,” said E.ON spokesman Vladimír Vácha.
According to Industry and Trade Ministry spokesman Tomáš Bartovský, the rise of energy costs is influenced by worldwide increasing oil prices and continuously growing energy consumption, which is most apparent in the rapidly expanding economies of China and India.
“We have to get used to the fact that the days of cheap energy prices are gone,” he said.
Bartovský added that the current situation is inevitable and that the rising trend will continue. “Energy prices are equally growing around the globe. If we compare ourselves with the rest of Europe, we are still cheaper and thus doing considerably well,” he said.
The increase in gas prices will mostly influence entrepreneurs from the food industry and service sector, who will have difficulties finding an alternative for their energy expenses because changing from gas to electricity would procure even higher costs, daily Hospodářské noviny reported Sept. 1.
The issue of rising gas prices therefore fuels discussion regarding the use of alternative energy sources. However, Bartovský does not expect these sources to play a significant role in overall energy consumption. “We can afford to use alternative sources of energy only to complement usual energy supply,” he said.   
Bibiána Duhárová can be reached at bduharova@praguepost.com
         


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