What do the subsidies announced by the government mean for the industry?

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By Harry Floudopoulos

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The measures announced for the subsidization of energy prices for industries are characterized as positive as they compensate to a certain extent the burden from the price spurts in both gas and electricity, in the last four months. Industry sources emphasize this, emphasizing, however, that it is important that the final energy cost that emerges is competitive with European competitors in Greek manufacturing. Regarding this issue, it seems that the subsidies announced are not enough as Greek industries and especially exports continue to have a competitive disadvantage in energy in the international market.

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In this light, the measures announced appear to be partly aimed at preventing the increases in the final price of products from being passed on. It should be noted here that a large number of industries have already launched price increases, given that energy costs began to rise in September, culminating in December, when there was no subsidy for energy costs for industry.

In any case, regarding the discount on natural gas, the subsidy announced for January is 30 euros / MWh, which is equivalent to 26% of the current price of fuel. The final price that results after the discount is 84 euros / MWh and according to competent sources remains unsustainable and uncompetitive for industries. In any case, it is necessary to continue even this subsidy for the coming months, given that there is no de-escalation of international prices and all forecasts speak of consolidating the increases resulting from the current crisis.

As for the discount on electricity, the same sources say that it is still early to calculate the percentage of the subsidy of 65 euros / MWh set for January. It is considered certain, however, that it will not cover 50% of the increase taking into account the Purchase Price in recent months. For electricity as well, the final price after the subsidy is considered to be unsustainable / competitive, however the need to continue or even strengthen in the coming months is pointed out.

Electricity

According to the official announcements made yesterday, all non-household tariffs will be subsidized horizontally, including the industrial ones with 65 euros / MWh for the total consumption. An amount of 8.22 million euros will be allocated for the energy-intensive industries of the Medium Voltage with consumption over 13GWh, while an amount of 2.69 million euros will be given for the industries of high voltage.

It is emphasized that the subsidy of 65 euros / MWh covers 50% of the increase, if the Purchase Price remains at 176 euros / MWh, a price that is valid for the first days of January. However, TEA is moving upwards, which means that the subsidy of 65 euros / MWh may end up being less than 50%.

Natural gas

In natural gas, finally, a subsidy of 30 euros / MWh is given to professional and industrial consumers with the total amount of aid amounting to 51 million euros for January. With the wholesale price of natural gas at 114 euros / MWh, after the subsidy there is a price of 84 euros / MWh, which is important in terms of total consumption even for energy-intensive industries.

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Source From: Capital

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