Czech senators ask Constitutional Court to scrap fuel price cap law

A group of senators has submitted a proposal to the Czech Constitutional Court to strike down the law that allows the government to regulate fuel prices by decree. The court received the petition on October 5 and published it on its website. Tomáš Goláň (ODS) spoke on behalf of the senators. The ČTK news agency is still seeking the government’s reaction.

The senators do not dispute that the state may regulate prices in extraordinary circumstances. But in their view, the law gives the cabinet overly broad powers and does not sufficiently protect businesses from prolonged loss-making trade.

What the senators object to

The law defines the government’s powers as a price authority in various emergencies. It allows the government to set maximum fuel prices for up to a year and to repeat the regulation for as long as the legal grounds persist.

“The law gives the government the possibility of very intensive intervention in price formation, while not establishing the kind of substantive safeguards that would rule out a stifling or de facto liquidating effect of a specific regulation on some of those affected,” the petition says.

The senators note that large companies, thanks to high turnover, more efficient logistics and a strong negotiating position, bear regulation more easily. A single price ceiling may force some small sellers to trade at a loss for a long time or even effectively deprive them of the ability to do business.

The arguments and the road ahead

The authors of the petition cite the Constitutional Court’s earlier case law: price regulation must not affect the very essence of the freedom to do business and must allow for covering costs and making a profit. In addition, a government price decree cannot be directly challenged in an administrative court, and an emergency alone does not justify restricting the right to effective judicial protection. In the senators’ view, the law is also vague, and the government gets too much freedom in deciding the form and strictness of the regulation. They also have objections to the procedure by which the law was adopted.

Jiří Přibáň has been appointed the judge rapporteur. He will prepare a draft ruling, but the full plenum of 15 judges will vote. The senators asked for the petition to be considered as a priority.

Which prices apply now

Under the law, the government issues a decree every month with a calculation formula, while the specific maximum prices are published in the Ministry of Finance’s price bulletins. Today the diesel ceiling rose by 25 haléř to CZK 48.61 per litre. Petrol stations may sell petrol at no more than CZK 47.21 per litre, 36 haléř more than on Tuesday. The ceilings do not apply to premium fuel.

Around Prague, based on reporting by seznamzpravy.cz