*Czech gas prices seen flat, electricity up next year
*Economic slowdown could dent power consumption
(Adds comments, details, background)
PRAGUE, Nov 24 (Reuters) - Czech gas prices will likely
stagnate in the first quarter of 2009 before falling later in
the year, while electricity prices for households will rise by
less than in previous years, cutting back inflationary pressure.
Power firms CEZ <> and Prazska Energetika (PRE),
which cover most of the country's regions, will raise household
electricity prices by 9.9 percent in 2009, the Energy Regulatory
Office (ERU) said on Monday.
Germany's E.ON <EONG.DE> will raise electricity prices for
its Czech customers by 16.4 percent from January.
However, ERU said gas prices will likely fall on the back of
declining oil prices, but warned a falling crown currency posed
a risk to this outlook.
Czech energy prices have steadily risen in recent years,
aiding profits at energy groups and adding to inflation that has
stayed elevated much of the year.
David Marek, an analyst with Patria Finance, said the rise
in electricity prices was no surprise and would add around 35
basis points to inflation.
"(This is) the same impact we felt this year, so I would say
it is no change for inflation development," he said.
An economic downturn is expected to slash consumer price
growth in the next year, along with fading base effects from
government tax changes.
The economic slowdown should also take a toll on power
consumption in the nation of 10.4 million, which has been on the
rise. CEZ had said this month it expects consumption to continue
growing but at a slower pace.
"We expect a small drop in electricity consumption next year
due to the expected economic slowdown," said Blahoslav Nemecek,
deputy chairman at ERU, adding it was difficult to predict how
much until more exact forecasts for gross domestic product were
available.
The Czech economy has been growing at a more than 6 percent
pace in the last three years, although that growth rate is
expected to be cut by around half this year and in 2009.
"We consider it positive news that two of the country's
three (power) distributors have reacted to the expected drop in
electricity consumption and limited price growth next year to
single digits," Industry Minister Martin Riman said in an email.
CEZ, the country's main energy supplier, reiterated on
Monday it planned to scale back margins to aid corporate
customers struggling under the global financial crisis.
(Reporting by Jan Korselt, writing by Jason Hovet)
