Energy price caps in the Czech Republic will cost 200 billion crowns ($8.79 billion) next year, Reuters reported.

The government previously said the expected cost of the price ceiling for households and businesses would be about 170 billion crowns.

The 200 billion kroner estimate assumes a maximum average annual spot price of no more than 350 euros per megawatt hour for electricity and 120 euros/MWh for gas.  About a third of consumption will be covered by purchases on spot markets.

The government this month approved a measure limiting electricity and gas prices for large firms to the same level as those for households and small firms already in force.

The government is financing the measure through windfall taxes on the energy and banking industries, as well as limits on revenues for electricity producers.

The Czech Republic’s budget deficit has reached record levels since the COVID-19 pandemic broke out in 2020. At the end of November, lawmakers approved the 2023 budget with a deficit of 295 billion crowns, compared to the 375 billion crowns expected in 2022.

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