Natural gas prices for Czech households will rise 10.4% from October, dominant supplier RWE Transgas said on Friday.
Analysts said the rise would add two- or three-tenths of a percentage point to already-high inflation, but a steep hike had already been factored in and it would not threaten the central bank’s forecast of price growth returning to its target next year.
Stronger oil prices and a turnaround in the koruna currency -- which has fallen 16.6% against the dollar since July 21 but is still 17.8% higher than a year ago -- have added to the gas price increase, RWE Transgas said. “The (weakening) Czech koruna makes gas purchases more expensive,” the Czech unit of Germany’s RWE said in a statement.
Consumer price growth has picked up in the past year on the back of tax changes and rising food and commodity prices, ticking up to 6.9% in July after easing slightly from a nine-year high of 7.5% hit in January and February. However, the central bank has maintained inflation will drop next year, returning near its target of 3%, plus or minus 1 percentage point, and market watchers agreed. “The rise in gas prices is more or less in line with central bank expectations,” said Jiri Skop, analyst with Komercni Banka.
Rising energy costs are among the factors keeping inflation at high levels this year. On Friday, central bank Governor Zdenek Tuma reiterated that price growth would slow to 3 to 3.5% in the Q1 next year. (Reuters)