Prague is used by Pražská plynárenská for loans up to four billion crowns
Updates: 06/17/2022 02:00
Released: 06/17/2022, 02:00
Prague – Prague will provide a guarantee to its joint-stock company Pražské plynárenské (PPAS) for bank loans of up to four billion crowns, intended for the purchase of gas in the storage tank for the next heating season. The city council decided on it tonight. Already at the end of April, the council approved that the city would directly lend two billion crowns to gas companies for the same purpose. The reason is the sharp rise in gas prices in connection with the war in Ukraine.
Pražská plynárenská is one of the largest domestic energy suppliers, supplying approximately 425,000 consumption points with gas and electricity. Councilor Jan Chabr (TOP 09) stated that the company will borrow half of the money from ČSOB and half of the money from Česká spořitelna, stating that it will also be able to draw in euros with a more favorable interest rate. At the same time, PPAS will pay a guarantee fee of 52 million crowns to the capital.
Since June, the company has averaged 39 percent gas prices for households that use the Standard price list, or products related to it. Customers with fixed prices have not yet been affected by the increase. Prior to that, the company had raised prices by an average of 15.7 percent in the same way since April.
Due to the extreme rise in energy prices on wholesale markets, about twenty suppliers have closed in the Czech Republic since last autumn. The largest of them, the Bohemia Energy group, ceased operations in mid-October 2021. It had about 900,000 customers. The situation continues with the war in Ukraine
At the EU level, it has been used for several weeks to interrupt the supply of Russian oil and gas, on which, however, many European countries, including the Czech Republic, are largely dependent. Last week, the European Union finally approved the sixth package of sanctions for the Russian invasion of Ukraine, which includes a ban on imports of mainly Russian oil from the turn of the year. The Czechia, Slovakia and Hungary have negotiated exemptions from the embargo.