During the peak summer season, the subsidy on electricity prices will be terminated, following the latest extension granted to this consumer support measure. This implies that increases are expected during the months with the highest electricity consumption due to the use of air conditioning systems.
Specifically, the subsidy on electricity prices was extended until June 30th, with no current intention expressed by the Government for further extension. This means that in July and August, when there is much higher electricity demand compared to other months, charges from the Electricity Supply Authority will experience an increase.
This has already begun to cause concern, given that oil prices in the international market are currently at high levels ($89.5 per barrel yesterday), and retail prices of transportation fuels are also increasing.
However, the increase in electricity prices (due to fuel costs) will be delayed, as the Electricity Supply Authority maintains reserves for a two-month period. Therefore, both the termination of the subsidy and the expected increases due to fuel prices will coincide during the summer months, an outcome that will affect consumers.
Even today, the existing subsidy on electricity prices does not seem to significantly benefit consumers. This is because, according to the latest revision by the Government, the subsidy is calculated based on the increase in energy costs compared to the tariffs that applied in June 2022. Therefore, due to the decrease in oil prices in the previous period, the final price per kilowatt-hour has slightly decreased, resulting in an average household benefiting only around €20 bi-monthly from the subsidy, instead of the €70 to €80 benefit it was a few months ago.
Brent crude oil prices have seen a slight increase in the last 48 hours, following a dip earlier in the week. Specifically, Brent crude oil for June delivery was trading just above $89 per barrel yesterday (previously it had fallen to $86-87), while on the other side of the Atlantic, the American crude oil type WTI is at $83 per barrel.
