Prague Gas Company Turns Down Two Billion Loan Offer from City

Prague’s gas utility, wholly owned by the city, has decided not to utilize the option to borrow two billion Czech crowns from the municipality to overcome difficulties stemming from last year’s surge in gas prices. Prague’s Finance Councillor, Zdeněk Kovářík (ODS), revealed this to journalists following a Monday meeting of the city council. He stated that the company did not require the loan given the market’s development.

If needed, the provision of the loan was approved by city representatives in April of last year. They also decided that the city would guarantee the company to banks from which it borrows. The reason for this support was the sharp rise in prices.

According to Kovářík, the city has managed to secure lower energy prices in tenders this year, leaving surplus funds compared to the budget. “We will have a certain reserve for other operating expenses,” the councilor said. He added that the city’s subsidiaries would retain the extra money, which could be used for other purposes.

Prague’s gas utility has long been one of the largest domestic energy suppliers, serving approximately 425,000 consumption points with gas and electricity. Last year, it reported a post-tax profit of 639.8 million Czech crowns, marking an almost 19 percent increase compared to the previous year. The company’s revenues also grew significantly, from 17.1 billion crowns in the year before last to 32.5 billion crowns.

On Monday, Prague’s gas utility announced that it had reduced natural gas prices for most customers as of September 1st. The gas selling price from the Standard basic tariff and products tied to it decreased by an average of 16 percent.