Minister Cingolani’s words at a CGIL conference yesterday made noise: bills in the last quarter of 2021 will increase by 40 percent: “Last quarter the electricity bill increased by 20%, next quarter it increased by 40%, these things must be said, we have a duty to face them. “It happens – he said – because the price of gas at the international level increases, it happens because the price of CO2 produced also increases”.
Many reactions from the political world, and in the evening some clarifications arrived from the minister himself: “The trend data on the increases in energy costs have been known and monitored for some time by the experts: the variations in bills are established every quarter by the authority for energy on the basis of the cost of raw materials such as gas and the cost of CO2 “, underlines the Minister of Ecological Transition. “The government is strongly committed to mitigating the cost of bills due to these international circumstances and to ensure that the transition to more sustainable energies is rapid and does not penalize families”, concludes the minister.
Cisl: “Unacceptable increase in bills, government intervenes”
“The forecast of an increase in electricity tariffs announced today by Minister Cingolani is unacceptable. After a year of very low prices for raw materials, starting with crude oil, prices are returning to pre-pandemic levels, but this does not legitimize price increases that would be unbearable and unjustifiable given that the tariffs themselves have never been positively affected by the down period “, underlines the CISL confederal secretary, Giulio Romani. “The 40% increase in bills, which should follow the already high recent increases, must be brought under control by the Government which cannot allow such a serious loss of purchasing power for citizens and, in particular, for workers for which also the many recent contract renewals could become inadequate if there were a surge in all prices that could follow that of energy “, adds Romani. “The risk of a resumption of inflation, which could also be devastating for public finances if it coincides with a recovery in interest rates – concludes the trade unionist – makes even more evident the need to urgently open a debate for a new social pact that put work, wages and worker protection at the center so as not to nullify the positive effects that we hope will come from the investments envisaged by the NRP “, concludes Romani.
The reactions of the political world
“Minister Cingolani confirms what we have been saying for days: electricity bills have increased by 40% since October. And this is unacceptable”, comments Giovanni Paglia, the national economic manager of the Italian Left. “The government must intervene immediately – continues the exponent of the national secretariat of SI – on VAT and excise duties, and then summon Enel and the other operators to reduce tariffs and profits. Italian families – concludes Paglia – have already given”.
“Cingolani is not a condominium administrator but a minister, he does not limit himself to denouncing something that a few already denounced in recent days, he takes action together with the government to avoid an unbearable sting for the families of our country” he always says from the Left Italian Nicola Fratoianni.
“An increase in the electricity bill of 40 percent in the next quarter would be an unsustainable sting for families and businesses, as well as a brake on the economic recovery – says the president of the senators of Forza Italia Anna Maria Bernini – Minister Cingolani has correctly launched the ‘alarm, but it certainly cannot be enough: immediate action is needed, and in the future it is necessary to examine without prejudice the return to nuclear power, otherwise we risk paying dearly for the transition to green energy sources programmed in Europe “.
It is not a bolt from the blue
The price of gas has been rising internationally for months now. Already two months ago Cingolani to the senators of the Industry Commission had explained that the latest increases in electricity bills were triggered by the increase in the price of hydrocarbons and the cost of carbon emissions in the European trading system, Ets (Emissions trading scheme) . But “the risk – the Minister clearly said – is that every quarter we find ourselves with an increase of 20%. And the only way out of these increases is to increase the production of energy from renewable sources as quickly as possible”. In short, the scenario had been clear for some time ..
The increase in the price of raw materials and, in particular, natural gas is evident from the beginning of the post-lockdown economic recovery, in parallel with a dizzying and disproportionate increase in demand over supply in some countries. China is among the Asian countries to have significantly increased the demand for gas, causing prices to rise internationally. To pay the consequences are the consumers, with skyrocketing bills, as happened last quarter.
Natural gas prices in Europe have risen by more than 170 percent since the start of the year, raising concerns about their potential macroeconomic implications. On an annual basis, a doubling of wholesale electricity prices would mean that European consumers pay up to € 150 billion more in electricity bills. High gas and electricity prices reverberate through supply chains and cause inflationary pressure. The consequence is that the increases in energy costs will give a blow to disposable income, especially of families with lower incomes.
“Stangata from 247 euros per family”
What can the government do against rising bills? It could be hypothesized to lower some improper charges in the bills, those that have nothing to do with energy (the tens of euros that on each bill are paid for “collection charges”, for example) or work on lowering the VAT on energy electricity and gas. The announcement of the 40% increase in electricity bills is a negative signal that conveys mistrust at a difficult time. In Spain, the Sanchez government will reduce the tax on electricity from 5.1% to 0.5% to mitigate consumer burdens: it is an example of an immediate and replicable initiative.
An increase of this magnitude, if it were really confirmed, would be lethal for families and businesses. For a typical family it would be equivalent to 247 euros on an annual basis. “To reckon in the pockets of Italians struggling with a possible increase in electricity bills of 40% in the next quarter, as announced by the Minister of Innovation Cingolani, is Marco Vignola, head of the energy sector of the National Consumers Union, is a credible estimate, even according to other careful observers.
The price of electricity has increased by more than 80% compared to January of this year, that of natural gas, on which the price of electricity depends, by more than 100%. In August, based on the preliminary estimate released by Istat at the end of the month, the consumer price index for the whole community (Nic) recorded an annual increase of 2.1% (2 tenths of a point above the previous month). And energy goods have run the most, with an increase of almost 20% and a decidedly sustained growth for electricity and gas tariffs (by over 34%), which increased in July. The updated rates for the last quarter of the year will start on October 1st. Pending a possible new reduction by the government, consumers are already afraid of “the autumn sting”.
Italy is not an energy self-sufficient country and every year it is obliged to import large quantities of fossil and renewable energy sources to meet its needs and produce electricity. It is the task of politics to “design” the future and understand what Italy’s energy future will be: between renewables and the nuclear “spectrum” that cyclically reappears, we will talk about it for a long time to come.