Norwegian government set to earn $7B from high energy prices

By Leila Nezirevic

LONDON (AA) - Norway could end up earning an additional 73 billion kroner ($7 billion) from energy this year.

According to the latest figures released Thursday by interest group and employer organization Energi Norge, the Nordic country will be making more money from high electricity prices than what it plans to provide in subsidies to households to help them cope with high energy bills.

Norway plans to spend up to 41 billion kroner ($3.9 billion) to help households deal with steadily rising electricity bills.

The government has promised to pay 90% of the bill when the cost exceeds 70 øre per kilowatt-hour.

Energi Norge estimates that the 73 billion kroner will come from 56 billion kroner ($5.5 billion) in tax, three billion kroner ($288 million) in value-added tax (VAT) and 14 billion kroner ($1.3 billion) from dividends from state-owned firms.

Energi Norge said the windfall initiative is still ultimately a good thing regardless of the fact that earnings from high energy bills will be substantially more than the country will pay out to assist households.

Knut Kroepelien, managing director at Energi Norge, told media outlet NRK that “70 billion shows that here we cover the electricity support scheme for households and the business scheme."

In addition, he said "we provide the opportunity for the community to finance other welfare benefits. So this is good news for Norway."

Last week, the Nordic country presented short-term energy relief to ease the shock of high electricity rates for businesses and households.

The government’s plan to ease the shock of record-high electricity rates failed to garner support among some government officials, businesses, national employers’ organization NHO and other unions.

Parliament then met in an extraordinary session Monday, where 92 relief proposals were put forth.