# Greece to set cap on electricity prices to relieve consumers- PM
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-05-05
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Greece to Cap Wholesale Electricity Prices Amid Soaring
Meta Description: Greek PM Mitsotakis announces new measures to combat soaring energy costs, including refunds and taxation on windfall income of electricity producers.
URL: https://financedigest.com/greece-to-set-cap-on-electricity-prices-to-relieve-consumers-pmhtml

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ATHENS (Reuters) -The Greek government will set a ceiling on wholesale electricity prices to help consumers and businesses cope with their soaring energy costs, Prime Minister Kyriakos Mitsotakis said on Thursday.

“Greece will not wait for Europe’s solution, which is taking too long. The hardship of households and businesses cannot wait any longer,” Mitsotakis said in a televised address.

Like many other countries, Greece has been in the grip of rising gas, electricity, fuel and food [prices since last year](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll"), exacerbated after Russia’s Feb. 24 [invasion of Ukraine](https://www.financedigest.com/ukraine-asks-for-south-korea-cybersecurity-aid-amid-russia-invasion.html "Ukraine asks for South Korea cybersecurity aid amid Russia invasion").

The [government’s support](https://www.financedigest.com/where-do-small-businesses-turn-when-government-support-dries-up.html "Where do small businesses turn when government support dries up?") programme will be four-pronged and will refund up to 60% of all the surcharges electricity consumers have paid from December until May, Mitsotakis said.

This refund will be limited to 600 [euros and will cover all consumers with annual incomes of up to 45,000 euros for electricity](https://www.financedigest.com/stellantis-to-invest-130-million-euros-in-german-plant-for-new-opel-electric-car.html "Stellantis to invest 130 million euros in German plant for new Opel electric car") consumed in their primary homes.

Electricity producers will be [asked to pay](https://www.financedigest.com/7-questions-to-ask-before-paying-off-your-mortgage-early.html "7 Questions to Ask Before Paying Off Your Mortgage Early") a “solidarity dividend” to society, meaning their windfall income will be taxed at 90%.

Effective from July, the government will introduce a new system which disconnects the international [price increases](https://www.financedigest.com/syngenta-4q-profit-falls-as-raw-material-prices-increase.html "Syngenta 4Q profit falls as raw material prices increase") in natural gas from electricity bills,” Mitsotakis said, referring to the measures as an indirect cap to stabilise consumer bills.

The scheme will [last for up to one year](https://www.financedigest.com/over-50-of-businesses-increased-their-cyber-security-budget-last-year-amid-attacks.html "Over 50% of businesses increased their cyber security budget last year amid attacks").

The conservative government has come under increasing pressure from the political opposition to [relieve the pain on consumers](https://www.financedigest.com/germany-to-lower-sales-tax-on-gas-to-7-in-bid-to-relieve-consumers.html "Germany to lower sales tax on gas to 7% in bid to relieve consumers"), especially the most vulnerable.

With gas having a large share in the country’s power generation mix, Athens has been subsidising power and gas bills and has also [offered a one-off grant to vulnerable groups at a total cost of 4 billion](https://www.financedigest.com/copper-miner-teck-resources-rejects-glencores-22-5-billion-offer.html "Copper miner Teck Resources rejects Glencore’s .5 billion offer") euros ($4.22 billion) since September.

Power costs have showed no signs of abating with consumers blaming a surcharge, applied by power suppliers and activated once the average [monthly wholesale power price](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") exceeds a specific limit, for ballooning power bills in recent months.

A Greek consumers union filed a class action lawsuit against a power supplier, [demanding that it scraps the surcharge and returns](https://www.financedigest.com/heathrow-airport-says-return-to-pre-pandemic-demand-years-away.html "Heathrow Airport says return to pre-pandemic demand years away") the additional costs to its clients.

(Reporting by George Georgiopoulos and Lefteris PapadimasEditing by Alistair Bell)


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