Wednesday, March 22

Austria unveils new 2 billion euro package for energy cost relief

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Austria unveiled an extra 2 billion euro ($2.2 billion) package on Sunday to help households and businesses shoulder massive increases in energy prices in the wake of Russia’s invasion of Ukraine.

The measures include increasing by half subsidies for people who commute by car, funding price cuts for public transport, and cutting surcharges on natural gas and electricity.

The package also includes aid for users of agricultural diesel, small and mid-sized companies that use lots of fuel, and companies that switch to alternative energy.

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The ministry said the measures would save a family that commutes 50 km (31 miles) a day about 900 euros by mid-2023, a hotel employing 50 staff around 20,000 euros, and a large industrial company around 3 million euros.

The new measures top up an inflation relief package from January worth 1.7 billion euros, Finance Minister Magnus Brunner told a news briefing, adding that Austria had provided 10 times as much cost-of-living assistance per capita as neighbor Germany this year.

“We are lowering the cost of daily living for all Austrians and giving our companies more breathing room,” he said, adding it was too early to say what impact it would have on state debt.

Energy Minister Leonore Gewessler highlighted 250 million euros in extra support for wind and solar power projects.

“The sun and wind don’t send us bills. Gazprom does,” she said, referring to the Russian company Austria relies on for gas supplies.

Austrian inflation rose to 5.5% in February.

EU finance ministers agreed last week to subsidize household fuel prices and offer support to companies hit by surging energy prices.

Austria gets 80% of its gas from Russia under contracts that run until 2040. Replacing this supply will require massive investment in infrastructure, the head of energy group OMV said on Saturday. ($1 = 0.9046 euros) (Reporting by Michael Shields; Editing by Pravin Char)