Bad forecasts!

No end in sight: energy prices rise again

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(Bild: APA/HELMUT FOHRINGER)

Energy prices for the average household rose for the second time in a row in December 2024. Compared to November, costs rose by 0.5 percent. For the end consumer, however, this is likely to be just the beginning of a new wave of inflation ...

Higher prices for diesel (up 1.1 percent), premium gasoline (up 0.9 percent) and heating oil (up 1.5 percent) were responsible for the rise in the Energy Price Index (EPI) in December, according to the Energy Agency. Fuel costs would have a particularly strong impact on the EPI, as they are of great importance for average households.

Although the burden fell by 12.1 percent year-on-year, as the prices for natural gas and firewood fell compared to December 2023, prices are expected to rise this year.

Energy prices continue to rise
Energy prices are still at a high level. Compared to before the crisis, prices for district heating were 74.1% higher and for natural gas 103.6% higher. However, as many energy sources are cheaper than a year ago, they are having a dampening effect on inflation, according to the Energy Agency.

However, this is likely to change soon and households can expect energy prices to continue to rise. "At the turn of the year 2024/25, several government support measures expired in Austria, including the electricity price brake, the reduction in the electricity and natural gas levy and the suspension of support costs for renewable energies," says the Energy Agency.

These are the price drivers in the new year
In addition, grid tariffs for electricity and gas are rising. We are also facing unpleasant adjustments to taxes and levies such as the electricity and natural gas levy, which were reduced to a minimum in 2022 due to the energy crisis. It is also unclear whether and to what extent the renewable subsidy contribution and renewable subsidy flat rate will apply in 2025.

The grid tariff is levied by the grid operator. These charges for electricity and gas will increase by 2025, in some cases very significantly - probably by an average of 23.1% for electricity and 16.6% for gas. 

The grid tariffs are set by E-Control. Prices are rising here because there are fewer consumers: More and more households that have the means to do so are generating their own energy. The number of gas consumers and consumption are also falling. There is also an investment backlog and the domestic grids need to be significantly expanded. The Chamber of Labour has repeatedly criticized the fact that the costs are being passed on "disproportionately" to households - while large-scale industry is being spared.

Russian supply freeze is currently not a significant factor
The gas supply stop by the Russian state-owned company Gazprom to the partly state-owned Austrian company OMV has nothing to do with the current price situation. As things stand, experts expect only minor further effects.

"Consumers can actively reduce their costs by identifying and replacing inefficient appliances, changing energy-intensive habits and thus reducing their consumption," said Lukas Zwieb, energy industry expert at the Energy Agency.

"Price comparisons, switching providers, producing your own electricity or purchasing cheap electricity from renewable energy communities can also help," added Zwieb.