This week in business news: fuel prices skyrocket across the Czech Republic; the Czech government will launch a new scheme to help local business in trouble; the new energy conception seeks to boost nuclear reliance by 2040; Czechs are spending less and saving more; Czech car makers see a rise in production in first half of 2012.
Fuel prices skyrocket across the country
Fuel prices in the Czech Republic reached an all-time high this week, with some pumping stations selling petrol for over 40 crowns a liter on Wednesday. According to data released by the Czech company CCS, the average price for the top-selling petrol Natural 95 was 38.04 crowns per liter, up by 4 hellers from the April record price. The price of diesel rose by 42 hellers from last week to a record 37.04 crowns per liter. Some analysts believe that fuel prices are not likely to fall in the near future, and may rise even further.
EU funds to help businesses in trouble
A financial support system similar to the German Kurzarbeit will be available to Czech businesses who have taken a hit as a result of the recession, starting in September. The government will pay out full salaries for workers who would otherwise have to be laid off for up to half a year. The money for the scheme will come primarily from EU structural funds. The support is primarily meant for small and medium-sized businesses, which will have to go through a rigorous selection process. The government has made it clear that these measures are not meant for businesses that do not have a sound business plan, and preference will be given to those who can prove that their losses are due to a temporary drop in sales.
New Energy conception relies on nuclear, cutting support for renewable resources
The Industry and Trade Minister released the government’s new energy conception on Tuesday, strongly coming out for nuclear energy as the future for the Czech Republic. Currently nuclear energy makes up 16 % of all the energy utilized in the country. According to the ministry, it should make up around 35% by 2040. Solid fuels, like brown coal, should decrease from 40 to 17% in the same period. While renewable energy sources are expected to make up some 22% of the energy mix 30 years from now, up from today’s 6%. But Industry Minister Martin Kuba emphasized on Tuesday that while the government will be supporting the expansion of nuclear plants in Temelin and Dukovany, he expects the renewable energy sector to develop without much financial support from the state.
Czechs spent less this year, but saved more
Czechs are making more money, but are spending less this year, the daily Hospodařské noviny reported on Thursday. According to the report, households of employed professionals without children, who are the top-earning group, had a 1.6% rise in earnings in the first quarter of 2012, but had spent 11.6% less than during the same time last year. Czechs are also saving more. The same childless households, who are usually the least frugal, saved an average of two and a half thousand crowns per month last year; the figures for the first three months of this year show their savings doubling. Sales and department store revenues took a hit this year, contributing to the overall slowing economy.
Czech automotive sector doing well amid fears of setbacks
Although the prognosis for European automotive industry is not looking good for the near future, the first half of 2012 saw a 3.7% rise year-on-year in Czech automobile production. Czech car makers manufactured over 744,000 vehicles from January to July of this year, the Czech Automotive Industry Association (SAP) announced on Monday. Škoda, the Czech unit of Volkswagen, announced that its deliveries rose in July by 6% compared to a year ago, putting out 72,600 cars. The company’s sales rose by 8.1% in the first half of this year.