Greece will double power and gas bill subsidies and increase handouts to help households tackle soaring energy prices, it said on Friday.

In total, the relief will reach 500 million euros, Fiance Minister Christos Staikouras told a news conference, up from subsidies of about 150 million euros announced in September.

European electricity and gas prices have rocketed this year as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic.

Energy Minister Kostas Skrekas, who also addressed Friday’s news conference, said the subsidies would be mainly funded by revenues from the sale of carbon emission allowances, which have also soared in value to record prices on the EU Emissions Trading System.

“Since the start of the year, gas prices in Europe have increased six-fold,” Skrekas said, adding that the possibility of a harsh winter intensifies concerns and makes the worsening of the world energy crisis more likely.

The measures will include an 18 euros subsidy for the first 300 kilowatt hours consumed by Greek households per month retroactively from Oct. 1 until the end of the year, up from a nine euro subsidy announced in September.

Low-income households will get a higher monthly subsidy of 24 euros a month, while gas and power suppliers will offer additional discounts to consumers.

The subsidies are estimated to cost 326 million euros. The government will also spend another 168 million euros to offer a higher one-off payment to help households buy oil, gas, wood and biomass for winter heating.

“We have a clear message: Amid an energy crisis which is unprecedented in intensity and duration, we will leave no household and no Greek citizen unprotected,” Skrekas said.

Greece has proposed an EU-wide mechanism for hedging against steep gas price fluctuations across the bloc, which could draw funds from advance payments of carbon emission allowances.

The allowances would be allocated to EU countries based on their heating and power consumption and on their gross domestic product per capita.

Source: Reuters