How much has the price of energy gone up?

In recent weeks, many people have received significantly more expensive gas and electricity bills than a year ago. The same happened in the autumn to companies, which suffer the effects of price trends in advance of families. Faced with costs almost fivefold in a few months, many entrepreneurs they had decided to stop entire production lines because the expenses would have been higher than the revenues. Private citizens have less opportunity to limit costs and for this reason the government was already intervened in December to limit the increases expected at the beginning of 2022. It was not enough: even with government aid, prices have risen significantly.

On Tuesday, during a hearing in the Senate, the Regulatory Authority for Energy, Networks and the Environment (ARERA) issued a report with some data: despite the government’s interventions, in the first quarter of 2022 the price of natural gas will increase by 94 percent compared to the same period of 2021, while the increase in electricity will be 131 percent.

In the wholesale market, i.e. where energy producers, sellers on the final market and customers with large energy consumption such as companies can buy and sell large quantities of energy, the increases have been much more substantial: from January to December, monthly prices they grew by almost 500 per cent for natural gas and 400 per cent for electricity. The price of natural gas plays a rather important role in the market, because its trend affects the prices of other energy goods.

The cause of the rise in prices, analysts and experts in the sector have long explained, are a series of concomitant circumstances, which include the imbalance between supply and demand in the natural gas market and the increase in demand worldwide following the resumed after the removal of the restrictions due to the epidemic, as well as the tensions between NATO and Russia, the country from which depends a large part of the supply of natural gas.

– Read also: How dependent we are on Russian gas

Russia has also reduced flows through its pipelines passing through Belarus, Poland and Ukraine in recent months, lobbying for the opening of the Nord Stream 2, the controversial pipeline that passes under the Baltic Sea, reaching Germany directly. The threat of an invasion of Ukraine and the resulting international tensions caused further price increases.

The effects of this situation are evident: for households, the cost of a cubic meter of gas went from 70.66 cents in the first quarter of 2021 to 137.32 cents in the first quarter of this year, including taxes.

The increases in the price of natural gas have dragged that of electricity, largely produced by plants that use gas. According to ARERA, the price of electricity also increased due to the decline in production from renewable sources that characterized the summer of 2021 compared to the levels of previous years. A year ago the cost of a kilowatt hour was 20.06 euro cents, today it is 46.03 cents, again including taxes.

As can be seen from the graphs, the increase in price was determined by the increase in the costs of raw materials, which historically in Italy represent between 30 and 50 percent of the final cost of electricity and between 30 and 40 percent of the cost of natural gas, before tax. The costs of transmission, distribution and metering must be added to the cost of the raw material, as well as taxes and charges called “parafiscal”, mainly linked to incentives for the production of energy from renewable sources supported by bills.

The prices of energy in the so-called “enhanced protection” service are updated by ARERA on a quarterly basis taking into account the forecasts of prices in the wholesale market. Families and small businesses, therefore, see the concrete effects of the trend every three months. In the free market, however, there are many offers that include additional services, at a fixed or variable price. In this case, the variations depend on the conditions of the contract and in particular on whether a fixed or market-indexed price has been provided.

The government is working to propose a new decree, expected in the Council of Ministers on Friday, to limit the costs of gas and electricity. According to the advances released by various newspapers, the goal is to allocate another 5 billion euros which would add to the 3.8 billion euros. already entered in the Budget law and the 1.7 billion approved in the “Sostegni ter” decree to help families in difficulty in the first quarter of 2022.

The aid consists in the elimination of system charges in the electricity bill for families and small businesses and the reduction of parafiscal charges for the gas one. The social bonus could also be reinforced, that is, the discount on the bill for families in difficulty which today is worth 912 million. Confirmation is also expected of the reduction of VAT from 10 or 22 percent, depending on the case, to 5 percent for both the energy consumed in homes and businesses, with a loss of revenue estimated at 608 million per year. year.

But the government is also worried about fuel prices, which have risen significantly in recent weeks. Following the tensions between Russia and the West, oil prices are very close to $ 100 a barrel. Just look at the signs displayed to distributors to see the consequences: the average weekly price of gasoline has reached € 1.835 per liter, while that of diesel fuel at € 1.708 per liter. The price of LPG, on the other hand, decreased compared to the peak recorded in November: it reached € 0.817 per liter.

Several associations representing consumers they noted that the price of fuel has reached one of the highest levels in the last ten years. It is not easy to understand how much these increases will affect the expenses of Italians. According to estimates made by consumer associations, this year families could spend 400 euros more than in 2021.

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