Czechs are turning off lights, keeping all appliances unplugged, reducing their oven use, and heating the house only with wood to save money.
For now, Czech citizens still have a fixed contract with an electricity provider. But Czechs pay for energy by estimating annual payments based on the previous year. If they use more electricity, or if electricity has become more expensive, they have to pay the remaining balance at the end of their contract. Several electricity providers have already notified their customers that starting in January, the bill will most likely be more than triple what it is now.
Despite the Czech Republic being one of Europe’s biggest electricity exporters, when taxes are included, Czech households are currently experiencing the second-highest electricity prices in the EU, just behind Estonia, with no end in sight.
Higher energy prices have also helped fuel inflation on the continent and around the world. The Eurozone has been hit with 10% inflation, and the Czech Republic suffered from 18% inflation in September. As a result, the country has experienced its most significant year-to-date drop on the Financial Situation Index (FSI), comparing the economic health of Czech Republic with other EU countries, since 1993.
The Czech government has been slow in coming up with measures to help average citizens suffering under high energy bills, Jan Švejnar, a U.S.-based Czech-born economist, director of the Center on Global Economic Governance at Columbia University, told Fortune.
Recently, ministers introduced a price cap for energy bills ($0.24 per kilowatt hour of electricity and $0.12 for gas) as a part of the relief package, which would guarantee a certain price level so that everyone would know the maximum amount they would be paying throughout 2023. But Švejnar warns that the price cap should be also set in a way that motivates Czechs to reduce their energy consumption even more than they are doing now. The Czech economy is demanding in terms of energy consumption, so he worries that the current energy savings won’t be enough for the whole winter.
Major politicians are telling people to put on a sweater. At one high school in the town of Kolin, principal Klára Brezmenová ordered one blanket for every student, so they could better adjust to lower temperatures as the school turned down the heat.
