Today in Norway: A roundup of the latest news on Wednesday
Estimates on how high energy prices in Norway could rise and the government to slash the use of oil money are among the headlines from Norway on Wednesday.
Energy prices could double during the winter
The price record of 10 kroner per kWh could be surpassed, and prices of 20 kroner per kWh for energy aren't out of the question this winter, public broadcaster NRK reports.
"Yes, but this is a rather extreme scenario. But I have stopped believing there is a ceiling on the electricity price. A month ago, 5-6 kroner were quite hefty prices, and ten kroner was somehow unthinkable. But now this ceiling has been moved quite high," Tor Reier Lilleholt, an analyst with Volue Insight, said when asked about the possibility of prices reaching 20 kroner this winter.
Norway is connected to the European market via energy transfer cables. Without these, energy prices would be around 25 percent lower, Lilleholt said.
Norway to slash the use of oil money
In order to combat inflation, the government will cut back on oil money in next year's budget, Finance Minister Trygve Slgasvold Vedum has said.
"The crises my generation has been through have had one answer each time: Increased use of oil money. But now it's different. Now the use of oil money must be reduced," Vedum said.
Vedum said that spending less oil money was a way of preventing the economy from overheating to prevent those on low and middle incomes from feeling the squeeze.
In addition, he said that the government was fearful of a spike in unemployment.
"History shows that after a period of high price growth comes a period of high unemployment. This government will avoid that at all costs," he said.
Revenues generated by the oil industry are partly used to fund government spending in Norway.
READ ALSO: What does Norway do with its oil money?
August breaks monthly energy price record
August 2022 has surpassed all previously monthly price records for electricity in Norway, according to energy news outlet Europower.
Southern Norway got an average monthly price of 434 øre per kWh throughout the month, while eastern Norway saw an average of 344 øre per kWh.
Europower reports that while higher individual, peak and daily prices have been reported, the continued high prices were unprecedented and shattered all previous monthly records.
PM pays tribute to Gorbachev
Norway's Prime Minister, Jonas Gahr Støre, has paid tribute to Mikhail Gorbachev, who passed away on Tuesday night, on Twitter.
"In connection with Mikhail Gorbachev's passing we remember a courageous leader who left his distinct mark on history by choosing reforms over repression and by making an important contribution to a peaceful end to the Cold War," the PM tweeted.