Fire-price increases in electricity prices have been brought by the upward trend recorded by raw material prices worldwide, resulting in a negative impact on households and businesses.
With the global economy unlocking restrictions on the pandemic crisis, and the Chinese dragon literally “thirsting” for raw materials, international oil prices are following a crazy course. According to the US Energy Information Agency (EIA), while the price of Brent in the second quarter of 2020 was $ 30 per barrel, for the corresponding quarter of this year it has exceeded $ 70 and estimates for next year are how this price will remain at similar levels.
Indeed, in recent months there has been a gradual upward trend in the price of the kilowatt hour and this is due to the upward trend of the world oil price. It is worth mentioning that last year 1/6/2020 the price of fuel oil was $ 220 per ton, while this year 1/6/2021 the price rose to $ 430 per ton, ie it has almost doubled, according to Platts prices.
In addition, as “P” presented in a previous report, the fares for fuel transportation in Cyprus have increased to a large extent due to external factors. At the same time, the new environmental rules as announced in the previous days in the framework of the energy package “fit for 55” to achieve the goals of energy neutrality, will lead, as estimated by several international energy analysts, to even higher costs in terms of energy consumption.
All of the above data create chain growth pressures in the supply chain which pass on the final costs to consumers and industry. Consumers have been seeing electricity bills go up for a long time and it looks like this frantic trend will continue for a long time to come.
In the case of Cyprus in August 2020, the average monthly weighted price of electricity for households was 0.22 cents / Kwh while today it is around the same levels. It is noted that the lowest weighted average price in recent years was in 2015 which was around 0.12 cents / KWh. And for industrial purposes the price of electricity increased significantly.
According to Eurostat data at the end of 2020 Cyprus had the third highest price after Ireland and Malta, which price was 0.11 cents / MWh.
“We have one of the most expensive industrial currents in Europe and this acts as a brake on further upgrading the competitiveness of the local economy. The assessment is that these levels will continue, this issue will not be resolved soon until the arrival of natural gas and the increase in the use of Renewable Energy Sources “, said to” P “the general manager of OEB, Mr. Michalis Antoniou .
It is worth noting that the price of electricity also includes fees for greenhouse gas emissions. In particular, the cost of purchasing greenhouse gas rights, which is the cost of purchasing the pollutants emitted by the EAC power plants, is gradually increasing. At the beginning of the year, the recovery of low-cost greenhouse gas rights costs was 2.7 cents / KWh, while at the end of July it rose to 3.7 cents / KWh. This cost is included in the fuel price adjustment.
With additional increases
In fact, as the Deputy Spokesman of the Cyprus Electricity Authority (EAC), Mr. Dimitris Nathanael, told “P” from July 1, the bills (of household customers) will be increased by 1.24% compared to the corresponding bills of the previous month, due to change in the price of fuel internationally or by 6.26% increased compared to two months previously.
Mr. Nathaniel stated that in the accounts of household consumers in the last twelve months, there has been an increase of 35%, however there was as he pointed out the 10% discount offered by the EAC from April 1 to October 1 due to pandemic (179 euros per month while last year 132 euros with a consumption of 800 kwh).
“In the last two years there has been a 0.5% decrease and in the last three years there has been an increase of 10.8% compared to this year. This increase is due to the increase in the price of fuel internationally. It is known that the cost of fuel is beyond the capabilities of the EAC. The EAC, in the context of the implementation of its development plan, which includes the development of RES projects, participation in the arrival of natural gas and adaptation of its units for use and natural gas, seeks to influence the cost of fossil fuels, such as oil, as much as possible. lower in shaping the price of electricity to consumers “, concluded the Deputy Spokesperson of the EAC.