The third Gulf War, between the United States and Israel on one side and Iran on the other, is having direct consequences on the world economy and also on citizens’ pockets: according to an analysis by Facile.it, bills for Italian families could increase on average by 121 euros for gas and 45 euros for electricity this year. The average annual total bill would thus come close to 2,600 euros. The impact will not be uniform for everyone. Families with variable price contracts are the most exposed because the economic conditions are in fact directly linked to the trend of wholesale prices. But even those who have chosen a fixed price are not completely safe in the long term: if the phase of tension were to continue, new contract renewals could take place under less advantageous conditions. But what are these increases due to?
What does the increase in bills in Italy and oil depend on?
Between Saturday 28 February and Sunday 1 March Tehran decided to interrupt naval traffic in the Strait of Hormuz – that portion of the sea between Iran and Oman. This has had disastrous consequences on the energy market: almost 30% of world oil traffic and 20% of LNG (liquefied natural gas) passes through the strait. The interruption has led to a price shock: gas alone has increased by 72% in the last week on the Amsterdam market – the reference price for establishing the price at which it is purchased by European countries. And even oil was no exception: Brent – the index that establishes the price at which oil is purchased by European countries – rose by 17%. These generalized increases have consequences on the cost of raw materials and have knock-on effects – by applying system charges and taxes – on the final price of our bills.
How to establish the final price on your gas and electricity bill
In the case of gas, the purchase price depends mainly on the prices of the Amsterdam gas exchange, which accounts for approximately 75%, while the remaining 25% is linked to the price of Brent oil. For electricity, however, the wholesale price is influenced above all by the cost of renewable energy (around 52% of hours) and gas (around 48%), which remains one of the main sources for producing energy.
Once the price of energy is formed on wholesale markets — as we wrote gas on the Amsterdam market or electricity on the electricity exchange — that cost becomes the energy raw material, which represents on average about 50% of the bill. Added to this are the costs for transport and management of the network (around 20%), the system charges intended to finance some energy policies (around 15-20%) and finally taxes and VAT, which account for around 10-15%. The sum of these components determines the final price paid by families and businesses.
What to do to protect yourself from rising bill prices
To defend themselves from increases in energy prices, Arera – the body that regulates and monitors the electricity, gas, water and waste markets – first of all invites consumers to monitor the offers and compare the available contracts, evaluating whether their tariff plan is still convenient compared to the market. In case of strong price volatility, it may be useful to choose offers that are more stable or have clear conditions on the update mechanisms.
Meanwhile, the Authority is carefully following the trend of the gas market: as explained by President Nicola Dell’Acqua, Arera is holding daily monitoring meetings on gas prices and, if the tension on them continues or worsens, it is ready to urgently report to the government the need for extraordinary measures to contain the impact on bills.
