The nightmare is already here: households have to pay 5-6 billion euros to buy the same amount. natural gas as well as fuel oil which they also bought last year to give him winter. When last October the season started with the price of heating oil 1.16 euros per liter and now we risk to start pay 1.7 euroswhen natural gas was last year in October 6 minutes kilowatt hour and this year it can be launched as well over 24 minutesthe danger is easily perceived. If these prices continue in the next period of time – at the moment all forecasts are extremely ominous – then households will face the dilemma of either reducing energy consumption or paying much more than last year. Increasing heating fees and subsidizing the price of natural gas remain on the agenda of the economic headquarters. However, given the “fiscal burden” that has been created to subsidize electricity, the scope for very bold state support and heating coverage is limited.

• Natural gas. The numbers supporting the risk of overburdening households are very specific. Of the total natural gas consumption – about 30 TWh according to official data for the first half of this year – about 8.2 terawatt-hours are available through the distribution network and go mainly to households. Well, on an annualized basis, households consume about 16 billion kilowatt-hours for heating. In January 2021, a kilowatt-hour of natural gas was worth 1.6 cents on the Amsterdam Stock Exchange. In October 2021, the final winter season started with the €6.38 price up 294% from the beginning of the year as the energy crisis had already erupted. We reached August this year at 17 euro cents, and the nightmare is the price of September. Since pricing is based on the previous month’s market price, from September households will start being billed based on the 300 registered in the last 24 hours at a MWh price. Even taking into account the discounts made so far (30 euros per MWh from the Energy Transition Fund), end-users risk paying even more per kilowatt-hour of natural gas than for 24-25 minutes. Considering consumption, the “account” risks even reaching 4 billion. So, unless there is a de-escalation of prices in the near future or a very bold subsidy from the state (both events are unlikely, based on current data), the “switch” to another fuel will definitely be at table.

Opportunities for very bold support and heating coverage are limited.

• Fuel oil. It began to be sold in October last year at a price of 1.16 euros per litre. In winter, prices have risen sharply, and at the end of the previous winter season, we reached the point where a liter costs 1.6 euros. In June, with the explosion in oil prices, the price even rose to 1.9 euros, and according to today’s data, we are close to 1.7 euros. Thus, a household that filled last year’s tank in October and expects to fill up by October 15 this year will pay about 46% more per liter if the world price of oil does not change. Considering that the annual consumption is about 1.2-1.3 billion liters, the burden of households using oil for heating could exceed 2 billion euros.

• Electricity. For households that choose electricity to meet their heating needs, this winter season starts with a very big difference compared to last year. The state subsidy covers general consumption and is not limited to 300 kilowatt-hours per month. Thus, for households that are heated by electricity – and generally avoid the 300 kilowatt-hour limit per month – the total charge per kilowatt-hour will be lower than last year, despite the surge in electricity prices that has reached retail sales. . prices are even higher than 80 cents per kilowatt-hour. Of course, the relief will be valid as long as the current system of state subsidies, which is funded from 2 billion euros per month, is respected. According to today’s data, the final retail price of a kilowatt-hour could fall below 22 euro cents and turn electricity into a cheaper heating solution for households, especially if a low consumption device such as air conditioners or heat pumps is used.

• Wood and pellets. Given that domestic production cannot keep up with ever-increasing demand, the price of wood as well as pellets is expected to be much higher compared to the corresponding last year. Despite price increases, the “shift” to combustion is expected to be even larger this year, especially in Northern Greece and the mountainous regions.

Hard winter comes to apartment buildings

Given the risk that this year’s heating costs will exceed 5-6 billion euros, it is clear that the 167 million euros allocated last year as a heating allowance for 830,000 households seems too “small” to limit the maximum high cost. An increase in the available fund is part of the government’s plans, but the additional amount allocated will depend on the budget margin. A margin that narrows more and more every time the price of natural gas, and therefore electricity, which is largely connected, rises to higher levels. The higher the price of natural gas, the higher the cost of subsidizing electricity bills and therefore the smaller the margins for other support measures, including the heating subsidy.

Over the past two years, the heating allowance has been expanded to include not only oil, but also natural gas and other fuels, even wood. But again, last season’s final statistics show that in practice, those who use oil receive the benefit: out of 830,000 recipients, 642,000 bought oil, and the remaining 187,000 bought natural gas and other fuels. Therefore, the “updating” of the criteria will not only look for additional fiscal space, but also a way to expand the list of beneficiaries, especially those who live in apartment buildings with central gas heating and are most likely to be left without heating due to cost or disagreement at general meetings. .

In order to support households, natural gas price subsidies will also be encouraged, but again, the available fiscal cap will determine whether the subsidy can exceed €30 per MWh, given that this money also comes from the Energy Transition Fund.