Prague’s municipal gas utility, wholly owned by the city, has decided not to proceed with borrowing two billion Czech crowns from the municipality to address challenges resulting from last year’s surge in gas prices. Zdeněk Kovářík, Prague’s Finance Councillor (ODS), made this announcement following a city council meeting on Monday. He stated that the company no longer required the loan due to favorable developments in the market.

The option to provide the loan had been approved by city representatives in April of the previous year. They had also decided that the city would offer a guarantee to the company when borrowing from banks, primarily as a response to the sharp increase in gas prices.

Kovářík emphasized that the city had successfully secured lower energy prices in tenders this year, resulting in surplus funds compared to the budget. “We will have a certain reserve for other operating expenses,” stated the councilor. He further noted that the city’s subsidiaries would retain the extra funds, which could be allocated for various purposes.

Prague’s municipal gas utility has historically been one of the largest domestic energy suppliers, serving approximately 425,000 consumption points with gas and electricity. Last year, the company reported a post-tax profit of 639.8 million Czech crowns, representing a nearly 19 percent increase compared to the previous year. The company’s revenues also experienced significant growth, surging from 17.1 billion crowns in the preceding year to 32.5 billion crowns.

In a related development, Prague’s gas utility recently announced a reduction in natural gas prices for most customers, effective September 1st. The selling price of gas under the Standard basic tariff and related products saw an average decrease of 16 percent, providing cost relief for consumers.

Article by Prague Forum