- The cost of electricity has spiked to the highest level in more than a decade, so Norway's government plans to subsidize the electricity bill to soften the impact.
- The subsidy proposal means that Norway's government would pay half of the portion of power bills above the prices of 0.70 Norwegian crowns per kilowatt-hour.
- This proposal would come at a heavy cost for the government as well.
Norway's government plans to subsidise the electricity bill of households to soften the impact from soaring power prices, Prime Minister Jonas Gahr Stoere said on Saturday.
The cost of the proposal, which is subject to approval by parliament, could amount to some 5 billion Norwegian crowns ($560 million) combined for the four months from December 2021 to March 2022, the government said.
A spike in the cost of electricity to the highest level in more than a decade has put pressure on the centre-left minority government to find ways to cushion the blow.
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"An extraordinary situation like this requires extraordinary measures," Stoere told a news conference.
The plan comes on top of earlier measures presented by the government amounting to between 4 billion and 5 billion crowns, Finance Minister Trygve Slagsvold Vedum said.
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Under the proposal, the government would pay half of the portion of power bills above prices of 0.70 crowns per kilowatt hour (KWh) or more, with a cap set at 5,000 KWh per month.
So far this month, wholesale spot prices in southern Norway have averaged 1.89 crowns/kWh including value added tax, according to data from electricity bourse Nord Pool.
($1 = 8.9304 Norwegian crowns)