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PM reveals energy measures: 60% rebate for 6 months, yet with a cap

Prime Minister Kyriakos Mitsotakis announced on Thursday evening a package of relief measures for households and businesses with the aim to tackle the soaring energy prices and to calm down an increasing social anger.

In his televised message the Prime Minister announced a program of four key points that includes a rebate of 60% for electricity subscribers and the practically cancelling of the “adjustment clause” that has burdened the citizens with electricity bills they cannot afford to pay.

Smart words by wise men?

PM Mitsotakis: “The cheapest energy is the one never consumed.”

The relief measures are:

• Homeowners and tenants will receive a rebate of 60% on the extra charges they paid for their electricity from December 2021 to May 2022

The refund will have a cap of 600 euros, it will apply to households with an annual income of up to 45,000 euros and for the main residence only..

“The refund will be paid directly to the bank accounts of electricity customers,” the PM said.

Furthermore, households will receive a 50% rebate for any increase in consumption of over 300 KWh for May and June 2022. the rebate will include also not main residence.

• The extra profits of power companies made during the energy crisis will be taxed at 90%. Revenues will be spent for the relief of households and businesses.

• “Regardless of European decisions, the Greek government, on its own initiative, will launch a system in July that will decouple international gas increases from the country’s electricity bills. This scheme will operate for up to one year,” Mitsotakis said.

He added that this scheme practically cancels the adjustment clause.

• The subsidy program to replace old and energy consuming A/C and refrigerators will be implemented in the following week. Also a scheme for businesses to install solar panels on the roofs of their buildings will be implemented. The scheme is due in autumn.

The ministers of finance and energy will give more details on the support measures tomorrow, Friday.

PS a few first thoughts:

1. I see no effective rebate measures for businesses

2. 60% rebate December – May and a cap of 600 euros means that citizens will receive a compensation of up to 100 euros per month.

It’s all about how politics wraps up a thin package of X. Y. support measures with clever words and syntax.

Not to mention that government sources were recently leaking to the press that the measures will be horizontal for everyone.

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  1. Call me simple but…wouldn’t it be more efficient to remove the adjustment clause?

  2. About 50 % of the electricity consumed in Greece is generated using natural gas. Greece buys that natural gas on the world market. The price of natural gas on the world market has increased by over 2.5 times since the end of December and is at a 14 year high. How can any industry pay 2.5 times more for its input costs and sell the end product at the same price?

    The UK has an energy price cap which is controlled by the energy regulator, i.e. effectively the government. The UK energy regulator cannot control world market prices. On 1 April 2022 it was forced to increase the price cap by 54 %. It is predicted that it will need to increase it again In October by a further 40 %. That is the UK equivalent of the adjustment clause in Greece.

    A total of at least 31 energy companies have gone bankrupt in the UK due to the combination of increasing world energy prices and the regulator imposed cap. The bigger energy companies were forced by the regulator to supply these 2 million customers. When a further company with 1.7 million customers declared it could no longer trade the big companies refused to take any further customers. The bankrupt company is being kept afloat with £1.7 billion of public money, i.e. people’s taxes. UK tax payers are paying £1,000 per customer because if they didn’t do so those customers would have no energy at all.

    • BP and Shells profits are through the roof. The UK government couldn’t care less about customers, their only interested in shareholders. Until we can rid ourselves of the Tories we have no chance.

  3. It’s always the same nonsense…publicly subsidized, privately profitable, the anthem of the upper tier, puppeteer untouchable. Enough with it already…

  4. Dave van de Gevel

    Paying a rebate into a bank account is fine if you are the registered customer.
    However, there must be a large number of renters who pay their electricity bills through their landlords.
    Ergo, they are not the registered customer.
    Is it safe to assume that the landlord/registered customer will pass on this rebate to their tenants?
    Problematic? I think so.

  5. I think there is a bit of confusion in the comments. The companies that drill for oil and gas, like BP and Shell, are indeed making larger than normal profits. The market price of oil and gas has gone up markedly, due to supply and demand imbalance, but their extraction costs remain the same so their profit increases.

    The article is about electricity generators, who are not the same companies as those supplying the oil and gas in most cases. Their input costs have gone up markedly so unless they put their prices up they will not cover their costs and will go bankrupt. Where a company, like BP, is registered in the UK, the UK government could, if it wished, impose extra taxation on that company and use it to subsidise UK electricity generators. I suspect most gas consumed by electricity generators in Greece is not produced by companies registered in Greece so the Greek government does not have the option of imposing additional taxation on them to alleviate rises in electricity prices.

  6. and again, this is not the power companies refunding the excessive amounts (no golden boys will need to give back their multimillion bonuses or sell off any villas), but the taxpayers being robbed yet again to hand out some more hush money – and of course as it sounds, through yet another ‘subsidy’ system where people will have to jump through hoops.
    it would of course be much simpler to remove the overcharges in the first place. but that would make sense. the big companies are raking in record profits on all this and we hear not a peep about that..