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With the rise in world prices for electricity and gas in June, the politician said he could not do anything because it is the cost of economic recovery and the setting of energy prices for end users is depoliticized and independent of the will of the government.
But by the end of September, the government had already found the strength to take steps to cut the final bills. “By assessing the situation as a temporary shock that should stabilize over time, we found solutions with the regulator and Ignitis company on how to stabilize it in the near future,” Prime Minister I. Šimonytė said in a press release.
What did Šimonytė say in June?
Since July this year, both electricity and gas have become more expensive for consumers: the average price of electricity for public supply has increased by approximately 8% and the price of gas for households has increased by 26 % and 50%. This was due to the increase in energy prices on the stock exchanges.
But then the prime minister said there was nothing she could do because end-user prices are depoliticized.
“For many years now, politicians have removed the fixing of these prices. This is not just for us, it is done so that we do not face situations that we have faced in the past, when we do not dare to make certain decisions, which may be dictated by market conditions, commodity prices. cousins. Due to political deduction, much more painful decisions have to be made later, “the prime minister told reporters at Seimas.
He stressed that in the case of gas, we have a return to the level of 2019, because in 2020 prices were abnormally low. The politician said that it was showing an economic recovery and had to accept it.
According to her, the government’s responsibility is not to look after prices, which depend on objective factors, but on people’s income.
What does Šimonytė say in September?
Starting in January 2022, energy prices will rise again, which should significantly increase the population’s electricity, natural gas and heating bills. For example, heating bills are projected to be a quarter higher during the 2021-2022 season, but bill growth will vary between cities: if a city has switched to heating from biofuels, the bills will increase less, if not more.
Having previously said that the government should take care not of prices but of people’s incomes, the Prime Minister has changed his mind, so the government has come up with a number of proposals: for example, expand logging sites, and ensure the efficiency of heating points, as this could save about 10%. hot.
300 million are foreseen for long-term measures. European money to reinforce the energy independence of homes. This basically means investing in solar and wind power plants and storage facilities, as well as replacing biomass and fossil fuel boilers.
Another measure is the creation of energy communities in which people become beneficiaries of solar or wind power plants built by these communities.
“It is expected that after the implementation of the plan measures, the price of electricity will be set at 21%. growth limit. This means that as the price of electricity increases in the markets, the price to the population will not increase any more. The price of gas for consumers with stoves, instead of rising 51%, will not increase more than 20%. Gas rate for heating instead of the planned 83 percent. it should increase no more than 30%, which is not more than a third, ”the government said in a statement.
Recently, the Presidency also proposed to postpone the second phase of liberalization of the electricity market. The Government and the Seimas have not yet had their last word on this issue, but it is also being debated.
“If we see that it provides additional benefits to consumers, we will also offer that solution,” said I. Šimonytė.
Expert: There is one thing I don’t understand
Tomas Janeliūnas, a professor at the Institute of International Relations and Political Science at Vilnius University and director of the public institution Energy Research Institute, says that trying to absorb rising energy prices through social policy is perfectly normal practice, so extending heat compensation is welcome and will help improve the situation of the people living in
The expert also assesses the waste of energy resources, curbing inefficiency and increasing the independence of households.
“It is also very good, great, you have to increase energy efficiency, it has been a long time that it has been necessary to do it, and the price increase is just a reminder that it is necessary to do it, you never have to relax.” even if there are cheaper price periods, “says Janeliūnas.
“But there is a third thing that I do not understand and that, in my opinion, is the opposite of the declared objective of liberalizing the energy market. It begins to say that the government will get involved in the price regulation mechanism and somehow force all consumers to take out a long-term loan to pay for energy resources, that is, it will set a price growth in five years, regardless of how those prices change. This means that we will pay for a long time for the price increase that has been produced at this time ”, the expert was surprised.
The portal tv3.lt recalls that the Ministry of Energy has announced that when the prices of electricity and gas reach a certain level of growth, it is considered to fix them and fix the price increase within a period of five years.
It is planned to slow the growth of electricity prices by 21%. appreciation limit. According to the Minister of Energy Dainius Kreivis, in this case we are talking about consumers who have not chosen a supplier or in cases where there is a guaranteed supply. The price of gas for food production would be set at 20%. growth threshold, price of gas for heating – at 30 percent. increase. Prices for electricity and gas would be set for the next six months.
“Nobody asks you too much, if you can pay that higher price now or not, if you want to make payments in five years or not. Here, in my head, there is an ideological choice of the Government: to intervene or not to interfere in the affairs of the market of I can’t defend either option, but it seems to me that this is a departure from the long-stated goals that we are going to liberalize the energy market, that we are increasing competition there, that we are not interfering. in what is happening in the markets, we are encouraging consumers to make independent decisions, suppliers, as this increases competition and everyone normally pays for those resources according to market fluctuations and not according to the request of the Government ”, says T. Janeliūnas.
“In my opinion, this is not a very fair act, when at the same time you declare the need to liberalize the energy market and then you get scared and say ‘oops, maybe we will stop that liberalization for at least half a year.’ This means that the choice of electricity providers will stop and even, I would say that those who signed the contracts last month will probably rush to rescind them, so it is possible that the liberalization process will return, “said the expert.
According to T. Janeliūnas, the government’s actions are similar to succumbing to emotional pressure, because it is not clear whether the rulers will be able to withstand the third crisis, the price increase, in addition to the coronavirus pandemic and migration management.
“They will not yet abandon plans to continue the liberalization process with the choice of electricity providers, but now it will probably be suspended for half a year.” For people in the future stages, this certainly won’t raise the question of whether those prices will be lower in six months. No one can answer this question yet. Two or three months will be gloomy, and what will happen in half a year, nobody knows. Global economic and climatic fluctuations can play a role here. Will that postponement solve the problem? It won’t solve it. It will simply allow the government to buy time and, instead of a big problem in January, it will more or less have to take that problem into account in the summer, ”said the interlocutor.
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