The government is “evaluating” its options regarding the future of the electricity subsidy ahead of its currently scheduled expiry at the end of this month, spokesman Konstantinos Letymbiotis said on Monday.
Speaking after a meeting between President Nikos Christodoulides and various trade unions and social groups regarding the cost of living, Letymbiotis said the matter of the fuel subsidy was one of a number of issues which had been discussed.
He said the issue had been raised by the meeting’s attendees, and that the government is “aware of it” and “knows it expires at the end of this month”.
“Already, various measures are being evaluated in various areas, in various aspects, as was done in previous cases. At the appropriate time when we have proceeded with this very careful, sober evaluation of the measures under consideration and of the data, they will be announced,” he said.
Speaking more generally about measures aimed at easing the cost of living crisis, Letymbiotis was keen to point out that the government has already spent €500 million on such measures since coming to power last year.
“As a government, we have prioritised a series of parameters, a series of factors which affect people’s daily lives, whether they concern the middle class, small and medium-sized businesses, or housing policy,” he said.
The electricity subsidy was first introduced last year and initially provided for a saving of €70 for the average household on a bimonthly electricity bill, though that number has since fallen.
This is because the subsidy is calculated against the cost of generation and not against the cost to the consumer, meaning that reductions in the price of oil, which is currently cheaper than it was a year ago, which do not necessarily translate into reductions in consumer pricing due to other factors such as rising costs of labour and maintenance, reduce the subsidy’s effective value to the consumer.
The electricity authority estimated in June that the subsidy would save the average household €22 per bimonthly bill, based on a consumption of 800kWh.
The subsidy rates are based on consumption, with the most vulnerable customers qualifying for a 100 per cent subsidy on any increases in the basic tariff, while consumption over a bimonthly rate of 800 kilowatt hours (kWh) is not subsidised at all.
