July 30, 2021

The uphill of autumn, which enters with increases in fuel, light and gas

The uphill of autumn, which enters with increases in fuel, light and gas

The uphill fall has reached the pockets of Spanish consumers with price increases in the energy field that affect, among others, gasoline and diesel, which has returned to mark an annual maximum, to the invoice of the light or natural gas rates.

In fact, in order to cope with the current rise in electricity prices and provide more coverage to the most vulnerable citizens, the Government approved a Royal Decree Law last Friday that, among other points, expands the coverage of the electric social bond and create a specific thermal one to cover the heating costs.

In addition, it has committed to approve a strategy against energy poverty within six months.

And, according to the Executive, the evolution of the wholesale market suggests that by the end of the year the electricity bill could experience a rise of 3.6% over the previous year, so that, for a household with a consumption of about 3,600 kWh per year, the increase could be 32.4 euros.

In fact, in recent weeks the price of electricity in the wholesale market has marked several annual highs, the last on September 28 with 75.92 euros per megawatt hour (MWh). Among the factors that are causing this increase is, fundamentally, the price of the emission rights of carbon dioxide (CO2) -which has tripled this year- and of natural gas and coal in international markets.

As a result of this increase, the electricity bill for an average user stood at an average of 63.86 euros in September, 14.1% more than a year earlier, equivalent to almost 8 euros per month.

But in addition to the light, the month of October has entered with an average increase of 8.4% in the last resort tariffs (TUR) of natural gas, which are those that mainly have domestic consumers, due to the important rise of the raw material cost, of 22.7%, since the regulated part of the invoice is frozen for 2018 for the fourth consecutive year.

But in addition, domestic consumers have noticed the cost of October in fuels, which have increased again in the last week, in which the diesel has returned to mark another annual maximum with 1,250 euros, a price that was not recorded since November 2014. If we look at gasoline, the liter is sold at 1,334 euros, levels of July 2015.

In short, since the beginning of the year the price of gasoline and diesel has risen by 10.16% and 12.92%, respectively.

With current prices, users have to allocate more than 73 euros on average to fill a 55-liter tank with gasoline and 68.75 euros if it is diesel.

In addition, the Brent oil barrel for delivery in December has also escalated in recent weeks. In fact, on October 2 exceeded $ 85, a price that was not seen since 2014, by the persistent fears of investors to a shortage of global supply.

So far this year, the price of oil has revalued around 27%. All this, in a context marked by the uncertainty of investors to the effects that may have the entry into force on November 4 of the economic sanctions imposed by the United States on Iran, the third producer of the Organization of Petroleum Exporting Countries. (OPEC).

With all this, commodity analyst at UBS Wealth Management Giovanni Staunovo believes that the decline in Iranian oil exports in recent weeks has been more pronounced than many expected, so it does not rule out a rise in prices by above 100 dollars per barrel in the coming months, according to EFE Dow Jones.

For its part, Caroline Bain, chief economist at Capital Economics, believes that prices could rise in the short term, but does not rule out that they return to $ 60 per barrel by the end of next year.

Be that as it may, the increases in energy prices have put autumn uphill.


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