Slovak PM steps up battle against utilities

TRENCIN, Slovakia, Sept 30 (Reuters) - Slovak Prime Minister Robert Fico stepped up his battle against dominant utilities on Saturday, saying the government would consider a special tax for monopolies if stricter regulation fails to bring down energy prices.

Fico, who won a June 17 election, has been negotiating with utilities for more than a month, seeking to fulfil promises of protecting the poor against rising energy bills.

On Friday the state regulator approved a 4.26 percent increase in prices of natural gas for households, less than half the amount demanded by gas distribution monopoly SPP.

But the prime minister, speaking after a conference of his leftist Smer party, said he was upset with the increase and wanted to amend the law governing the state regulator to strengthen its control over pricing.

"If this fails, and these needless price hikes continue ... the government programme says the cabinet can proceed to implement selective taxation for monopolies," Fico said.

Higher taxes for wealthier Slovaks and businesses, namely utilities and financial institutions, were the cornerstone of Fico's populist campaign that allowed him to push reformist Mikulas Dzurinda from power.

Since taking over as prime minister, he has railed against foreign owners of Slovak utilities and banks, saying they are too profitable.

SPP is 51 percent state owned, but managed by a consortium of Gaz de France <GAZ.PA> and Germany's E.ON <EONG.DE> Ruhrgas which jointly hold a 49 percent stake.

SPP had asked for a nearly 9 percent hike in gas prices due to high global oil prices. ((Reporting by Martin Santa, edited by Sonia Oxley; bratislava.newsroom@reuters.com; Reuters Messaging: martin.santa.reuters.com@reuters.net; +421 2 5341 8402))

Keywords: SLOVAKIA GOVERNMENT