Prime Minister: Government cannot afford to pay energy support to everyone

Enefit Power mast.
Enefit Power mast. Source: Ken Mürk/ERR

Energy prices might grow even higher than during the recent heating period this coming fall and winter. Prime Minister Kaja Kallas considers it more sensible to limit support to those who really need it instead of compensating everyone which she says Estonia cannot afford.

Kallas said on the "Stuudios on peaminister" radio show on Monday that while people should plan ahead for next winter, many have nothing left to dial back.

"As I have said many times, we need to help those having the hardest time. The more we concentrate on targeted measures, the more we can help those who really need it. Simply distributing benefits evenly would leave less for those in need," she explained.

Kallas recently wrote to Minister of Economic Affairs and Communications Taavi Aas (Center) asking for forecasts for the price of electricity and gas a year from now and plans for alleviating the effects of price advance.

The PM said that she fears preparations for the fall are not serious enough, energy is firmly in the administrative area of the economy ministry and that she wants to see a clear plan.

"There are several aspects to this. One is supply security, that we have electricity and gas with which to heat our homes," Kallas said, adding that relevant activities include the LNG terminal project, stockpiles and agreements with Latvia and Finland to help each other in case of shortages.

The prime minister said that another important aspect concerns guidelines the ministry can put together to help people prepare. While not everyone can cut costs, people should seek fixed price contracts in the summer when prices are lower to manage risks.

Kallas also finds that it needs to be analyzed whether amending legislation could help sellers or grid operators bring down prices.

"But that is work that needs to be done by the economy ministry, which is why I have asked for a clear plan as verbal requests for information have gone unanswered. I'm afraid we might be repeating the coronavirus crisis pattern where we failed to take measures in time and were taken by surprise," she admitted.

The PM said that compensating everyone for high energy bills is not the answer as Estonia simply cannot afford to do that. All elements need to be considered.

Kallas said that energy traders forecast next fall to be worse than the previous one, meaning that both the government and people need to think about solutions.


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Editor: Marcus Turovski

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