Czechs Forbidden from Spot Tariffs Despite Low Market Prices

Wholesale energy markets in the Czech Republic have recently experienced a period of calm. Since the beginning of the year, prices have gradually dropped well below the government-imposed ceiling, which energy suppliers have reflected in their pricing. However, spot prices on the market remain more favorable than the current offerings, prompting the question of whether the government should allow traders to offer spot tariffs once again. Unfortunately, as a protective measure against high prices, households are prohibited from accessing these tariffs.

The price of electricity on the wholesale market has been hovering around 150 euros (3,500 CZK) per megawatt-hour (MWh) in recent weeks. In comparison, the price for consumed gas is approximately 35 euros (830 CZK) per MWh. Despite the downward trend, these spot prices are lower than the prices offered by most Czech suppliers through various fixed-term contracts.

The news has led to inquiries directed at the Ministry of Industry and Trade (MIT) regarding the potential return of spot tariffs for households, which are currently forbidden (businesses can still utilize them). However, spokesperson Marek Vošahlík says this topic is not now on the ministry’s agenda. Several reasons underlie this decision, with the primary concern being the protection of consumers.

Vošahlík explained, “Customers who opt for spot tariffs bear all the risks associated with price fluctuations. Spot products may appear advantageous during low energy prices in the market but can also lead to significant payment increases when prices are high. This preventive measure protects consumers from potential drawbacks associated with spot tariffs.”

The ministry aims to safeguard vulnerable customer groups who might consider spot products the safest option, although they come with risks such as sudden price spikes.