Eurostat lowers the rise in electricity in 2021 to a third of what the INE calculates

Eurostat lowers the rise in electricity in 2021 to a third of what the INE calculates

In Spain, there are two good statistics on the price of electricity consumed by households: the Family Budget Survey (EPF) of the National Statistics Institute (INE), which is published annually, and the European harmonized statistics published by Eurostat, every six months. and annual. The INE also publishes the Consumer Price Index (CPI) which does not report the price but its monthly variation. Contrary to the EPF, which represents all households, the CPI does not include the liberalized market according to the INE Press Release of January 31.

The main characteristics of the two cited sources were summarized in an article from February 8 in

The EPF is based on the electricity bills of the 24,000 households in the sample and for 2020 it shows an average price of 0.279 euros/kwh and an average annual consumption of 2,822 kWh. The average annual expenditure is estimated at 786 euros per year.

Eurostat statistics It is based on price data provided by electricity companies to the Ministry of Ecological Transition (MITECO) and which it transmits to Eurostat.

The statistic covers more than 93% of the 28 million domestic contracts, covers all types of contracts, differentiates five bands or consumption sections and details three price levels: excluding all taxes, excluding only VAT and with all taxes.

For the purposes of comparison with the CPI or with the EPF, the final price that includes all taxes must be used and focus on two sets of contracts:

On April 5, Eurostat published the data for Spain for the second half of 2021 (with some delay compared to the bulk of the European countries whose prices already appeared on the Eurostat website on April 2) and for domestic consumers of the band 2,500-5,000 kWh the average price is estimated at €0.282/kwh, with a growth of 22.5% compared to the same half of 2020. Spain remains in fifth place for high prices, below Denmark, Germany, Belgium and Ireland.

The aforementioned increase is half that of the CPI for electricity, whose average value in the 2nd half of 2021 was 48.2% higher than that of the same half of 2020. The attached graph compares the variation in the CPI and Eurostat prices in the last 8 semesters.

For contracts with consumption of less than 5,000 kWh, growth is only 13.2%, 30% of the increase in the CPI for electricity.

Averaging the data from the semesters of each year, the price series shown in the table is obtained.

The price with taxes of the typical domestic consumer, represented according to Eurostat by annual consumption between 2,500 and 5,000 kWh, grows by 13.3% in 2021. Compared to the growth of 35.6% shown by the CPI for electricity, it is 2.6 times lower.

For consumption of less than 5,000 kWh, growth is reduced to 6.9%, reaching €0.295/kwh. This is the price that the INE 2021 EPF can be expected to show when we know its results in June.

If the CPI for electricity had grown by 13.3% in 2021, as shown by the Eurostat statistics, instead of 35.6%, the general CPI would have grown by 2.3% in 2021 instead of the 3.1% actually registered. It can be said, therefore, that the exclusion of the liberalized market in the CPI for electricity has raised inflation in Spain by 8 tenths, or 34%.

Another aspect of interest is the degree to which the measures to reduce electricity prices have met the Government's objectives. When presenting the measures contained in RDL 17/2021 of September 14, government press release stated as an objective of the shock plan "to maintain the final electricity bill of consumers this 2021 at the same level as 2018".

The table above contains the necessary data to establish the degree of compliance. For households with annual consumption of less than 1,000 kWh, the objective has been more than met, but for the typical Eurostat consumer, with annual consumption between 2,500 and 5,000 kWh, the increase in the three-year period amounts to 5.7%, exceeding the increase in the CPI without energy (2.9%) in the same period.

For consumers with annual consumption of less than 5,000 kWh, growth between 2018 and 2021 is estimated at 3.3%, only 4 tenths above the CPI without energy.

The Eurostat statistics do not detail the prices by type of contract (social bond, regulated market and free market) so we must ask the INE to include a specific module in the 2021 EPF that it will publish in June to show the distribution of the price by type of contract and consumption segments. In addition, given the households' two-year stay in the sample, the HBS can also provide good measures of annual price variation.

Finally, it should be noted that the Eurostat statistics are of special interest to study the impact of the measures adopted in 2021 to lower the electricity bill. Both those that come into force on June 1 with Royal Decree 148/2021, relating to tolls, set by the CNMCand to the charges, set by MITECO, such as the fiscal measures adopted in June with RDL 12/21 and in September with RDL 17/21.

The difference between the final price and the price before taxes approximates the tax burden borne by the consumer and the Eurostat statistics allow the annual variation of this burden to be studied by consumption brackets. In particular, for the band between 2,500 and 5,000 kWh, the price before taxes grows by 32.6% in 2021 and the tax burden is reduced by 9.3%.

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