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Factbox-Europe's efforts to shield households from soaring energy costs

·7-min read
A warning label is seen on the front of a gas meter at a house in Manchester

By Nina Chestney

(Reuters) - Europe faces massive increases in energy bills driven by rocketing gas prices as the Ukraine conflict and European sanctions on Russia heighten concerns over gas supplies.

Here are some of the policies Britain and European Union member states have announced to help shield consumers (in alphabetical order):

BRITAIN

Britain has a price cap on the most widely used household energy contracts but energy bills will jump 80% to an average of 3,549 pounds ($4,188) a year from October, regulator Ofgem said, calling it a "crisis" that needed to be tackled by urgent and decisive government intervention.

Forecasters expect bills to be just below 6,000 pounds through next year as the cap is raised further, meaning households could be paying nearly 500 pounds a month for gas and electricity, a higher sum than rent or mortgage for many.

The Conservative Party leadership contest between Foreign Secretary Liz Truss and ex-finance minister Rishi Sunak runs until Sept. 5, when one of the two will become the next prime minister.

So far they have suggested suspending environmental levies or cutting a sales tax - proposals that have been dismissed by analysts as far too little to avert the hit to household budgets.

In May, the Conservative government set out a 15-billion- pound support package to help households. Every household will receive a 400-pound credit to their energy bills from October.

More than 8 million low-income households receiving state benefits are also being given a further one-off 650-pounds, with additional help for pensioners and disabled people.

BULGARIA

Bulgaria introduced a discount of 0.25 levs ($0.12) per litre of petrol, diesel, liquefied petroleum gas and methane from July until the end of the year for households, and scrapped excise duties on natural gas, electricity and methane.

The Balkan country, a net electricity exporter, has also kept regulated prices for electricity for households at bay, allowing only an average 3.4% annual increase as of July.

DENMARK

In June, lawmakers agreed a cash handout to the elderly and other measures totalling 3.1 billion Danish crowns ($439 million) to cushion the impact of soaring inflation and high energy prices, including a cut to a power price levy.

Lawmakers had previously agreed on subsidies worth 2 billion Danish crowns ($288 million) to be paid to some 419,000 households hard hit by rising energy bills.

EUROPEAN COMMISSION

European Union countries are largely responsible for national energy policies, and EU rules allow them to take emergency measures to protect consumers from higher costs.

The EU in July asked the 27 member states to reduce gas demand voluntarily by 15% this winter, with mandatory cuts possible.

The bloc also aims to refill gas storage facilities to 80% of capacity by Nov. 1.

FRANCE

France has committed to capping an increase in regulated electricity costs at 4%. To help do this the government has ordered utility EDF, which is 80% state-owned, to sell more cheap nuclear power to rivals.

New measures announced since the Ukraine crisis - such as helping companies with the cost of higher gas and power bills - bring the total cost of the government package to between 25 billion and 26 billion euros ($27 billion), Finance Minister Bruno Le Maire said.

French energy regulator CRE said last month it was proposing a 3.89% increase in regulated electricity sales tariffs (TRVE). The government has the power to oppose the regulator's proposed rate hike and set new tariffs at a lower level, or reject them outright.

GERMANY

Workers who pay income tax will receive a one-off energy price allowance of 300 euros. Families will receive a one-time bonus of 100 euros per child, which doubles for those on low incomes.

Over the next few years, some 12 billion to 13 billion euros will be allocated annually to subsidise renovations to old buildings.

However, German households will have to pay almost 500 euros ($510) more a year for gas after a levy was set to help utilities cover the cost of replacing Russian supplies.

The levy, introduced to help Uniper and other importers cope with soaring prices, will be imposed from Oct. 1 to April 2024.

GREECE

Greece has spent about 8 billion euros on power subsidies and other measures since September 2021.

It will double subsidies for power bills next month to 1.9 billion euros, extending financial support introduced last year to shield consumers from surging energy prices.

The subsidies will absorb up to 94% of the rise in monthly power bills for households and 89% of the rise for small and medium-sized firms.

Greece has imposed a cap on payments to power producers to reflect their real production costs, effectively scrapping a surcharge on electricity bills.

HUNGARY

Hungary has capped retail fuel prices at 480 forints ($1.23) per litre since November, well below current market prices. The measure led to such an increase in demand that the government was forced to curb eligibility for the scheme.

Sharp rises in gas and electricity prices have also forced the government to curtail a years-long cap on retail utility bills, setting the limit at national average consumption levels, with market prices applying above that.

Hungary has also imposed an export ban on fuels and recently loosened logging regulations to meet increased demand for solid fuels such as firewood.

ITALY

The country in early August approved a 17-billion-euro aid package to help shield firms and families from galloping energy costs and rising consumer prices.

That comes on top of some 35 billion euros budgeted since January to soften the impact of sky-high electricity, gas and petrol costs.

Under the package, Rome extended to the fourth quarter existing measures aimed at cutting electricity and gas bills for low-income families as well as reducing so-called "system-cost" levies.

A cut in excise duties on fuel at the pump that was set to expire on Aug. 21 was extended to Sept. 20.

Italy is also considering preventing energy companies from making unilateral changes to electricity and gas supply contracts until April 2023, according to draft measures approved by the government in early August.

NETHERLANDS

The Netherlands has cut energy taxes for its 8 million households.

NORWAY

Norway has been subsidising household electricity bills since December and now covers 80% of the portion of power bills above a certain rate. This will be increased to 90% from September, with the scheme to remain in place until at least March 2023.

POLAND

Poland has announced tax cuts on energy, petrol and basic food items, as well as cash handouts for households. It has also extended regulated gas prices for households and institutions like schools and hospitals until 2027.

The government in July agreed a one-off payment of 3,000 zlotys ($648) to households to help cover the rising cost of coal. Prime Minister Mateusz Morawiecki has said the total cost of curbing energy prices in Poland will reach around 50 billion zlotys.

ROMANIA

Romania's coalition government has implemented a scheme capping gas and electricity bills for households and other users up to certain monthly consumption levels, and compensating energy suppliers for the difference. The scheme is due to be in place until March 2023.

Prime Minister Nicolae Ciuca estimated in February the support scheme would cost some 14.5 billion lei ($3.27 billion), but analysts now expect it to exceed 10 billion euros ($10.01 billion).

The leftist Social Democrats, parliament's biggest party and a part of the governing coalition, support replacing the scheme with regulated prices.

SPAIN

Spain has begun to temporarily subsidise fossil fuel plants' power costs in a bid to bring down high prices in the short term. The system is due to be in place until May 31, 2023.

It has also cut taxes to reduce consumer bills, and announced 16 billion euros in direct aid and soft loans to help companies and households weather energy prices.

SWEDEN

Sweden has set aside 6 billion Swedish crowns ($605 million) to compensate households worst hit by the surge in electricity prices.

($1 = 1.9546 leva)

($1 = 0.9986 euros)

(Reporting by Nina Chestney, Bozorgmehr Sharafedin, Canan Sevgili, Francesca Landini, Tsvetelia Tsolova, Gergely Szakacs, Alan Charlish, Stine Jacobsen, Ingrid Melander, Luiza Ili, Nora Buli, Susanna Twidale, Kylie MacLellan, Forrest Crellin, Isla Binnie, Kate Abnett, Joseph Nasr, Robert Muller, Giuseppe Fonte, Benjamin Mallet, Stine Jacobsen, Angeliki Koutantou, Anna Koper, Alan Charlish; Editing by Aurora Ellis, Susan Fenton, David Evans, Jan Harvey, Mark Heinrich and Alexander Smith)