Typical sheltered households’ December 2023 natural gas bill dropped 6.7% from the previous month. The entire decrease is due to the decrease in expenditures on natural gas purchases. Arera conveys this in its latest tariff update for domestic customers who have not yet chosen the free market. The energy, networks and environment regulatory authority notes that wholesale gas prices in December fell compared to November, with the price for customers in the protected market equal to 36.30 euros per megawatt hour.
The cost of gas for a typical family is also falling: in the last year (January-December 2023) it was approximately 1,307 euros before taxes, decreasing by 29.9% compared to the equivalent twelve months of the previous year (January-December). 2022). Arera’s calculations are based on a typical family with an average consumption of 1,400 cubic meters per year. For the consumer association Assoutenti, this means “cutting tariffs below expectations”.
The news that Arera conveyed in the past hours is, as mentioned before, the latest update for domestic customers who have not yet chosen the free market. In fact, the end of the protected gas market begins on January 10, 2024, while the end date for electricity has been postponed to July 1 (all information here). He explains that in the future, the gas price component will be updated monthly, with the same criteria, times and methods used so far, to cover the supply costs imposed on customers of the vulnerability protection service, which is active for approximately 2.5 million families. .
Insult to natural gas bills: VAT returns to 22 percent
The regulatory authority reminds that the abolition of general charges for gas, as well as for heat and district heating management, and the reduction of VAT to 5% have been approved for December and the whole of 2023, and these rates will return to normal rates from January. 2024. And here are the fine points. A new increase is coming: As of January 2024, VAT will return to 22% from last year’s 5%. The increase will eat up some of the savings due to the decline in energy prices. Consumer associations say that if the government does not renew the VAT discount, which expires on December 31, “families will have a Caporetto.” A mini hit.
“The reduction in natural gas tariffs in December is undoubtedly positive, but below expectations. Given the downward trend in prices in international markets, a more significant decrease was certainly expected,” Assoutenti said. “In 2023, expenditure on energy supply in the protected market reached 2,197 euros per family: 889.60 euros for electricity, 1,307 euros for gas,” said the association’s president, Furio Truzzi. However, since January consumers have experienced a new ‘gas pain: VAT reduction on the invoice ends, tax increases from 5% to 22%: this is equivalent considering the December gas tariffs, only an additional expense of approximately +250 euros per unit per year for VAT’ .
“The reduction in tariffs launched in December will be completely canceled by the VAT increase in January, not to mention that in a few days the protected market will end, with all the relative unknowns of this transition,” Truzzi added. “There will be vulnerable gas users living in apartments with central heating systems who will be forced to switch to the free market despite having the requirements set by law to remain in the wider protection regime”.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
