Expensive energy: what electricity and gas customers need to be prepared for

Electricity, gas and oil are becoming more and more expensive.

The higher prices have recently been seen above all at filling stations, but will also affect electricity consumers and households with gas heating.

Energy suppliers expect spending to increase for many.

"The longer the crisis lasts and the higher the prices rise, the more municipal utilities will have to adjust their prices, with everything being done to cushion price increases as much as possible," says Ingbert Liebing, Managing Director of the Association of Municipal Enterprises, the FAZ

Jan Hauser

Editor in Business.

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Many municipal utilities have joined forces in the association.

However, expiring procurement contracts would currently have to be re-signed at significantly higher prices.

"In view of the international situation and the current turbulence on the markets, no one can say for sure how long the price rally on the energy markets will last or how much the prices will rise," he says.

The energy group Eon also expects tariff increases for its 14 million private and corporate customers, without giving details.

"We have to reflect this unprecedented situation on the market in our pricing, but try to cushion as much as possible," said Germany boss Filip Thon of the editorial network Germany.

Some of the wholesale prices for natural gas would have been twenty times higher than in spring 2020.

There are eightfold surcharges for electricity.

"More than a thousand increases in the basic electricity supply have already been announced and some have already been implemented," said Thon.

"It's about surcharges of 35 percent on average."

Increases hit consumption with a delay

All energy prices have increased significantly since last year and have climbed even further with the Russian war of aggression in Ukraine.

After the sometimes sharp rises, things have recently eased up again and prices are falling, although they are still above the level of previous years.

The question is how much natural gas and other energy supplies will come from Russia to Europe in the future and which other countries will supply how much.

Household natural gas consumption also depends on the temperatures: when the weather is milder, natural gas can be stored more easily.

It will also be important how prices on the world market continue to develop.

Stronger lockdowns for corona protection reasons in China could reduce demand and thus prices.

Gradually, however, the higher costs will also reach end users.

At the moment, it is usually to be expected that the increase in gas prices will be higher than the increase in electricity prices.

The local suppliers usually have long-term contracts, especially for the gas supply: This helped to cushion the increase last year.

"In general, municipal utilities with their conservative and sustainable purchasing policy have been able to prevent sharp price increases over the years and cushion short-term price jumps because supply contracts have been and are staggered and concluded with different terms," ​​says Liebing from the municipal utilities association.