London e Copenhagen the European capitals where so far families have received the energy bills saltiest in Europe, followed by Roma, Amsterdam e Brussels. But if we include taxes in residential electricity prices, we find Rome in first place, which in August reached 82% of the final price. For what concern gas instead the most expensive bills were paid by the inhabitants of Amsterdam, Followed by Copenhagen e Stockholm. While including taxes, the ranking changes: Luxembourg in first place followed by zagabria e Bratislava. This is what emerges from the latest monthly report Household Energy Price Index (HEPI) on the change in wholesale prices have affected electricity bills and natural gas for domestic use.
Energy bills: without countermeasures, the cost is bound to increase
Europe is experiencing a continental energy crisis caused by reduction of oil and gas flows from Russia, but the direct impact on households varies considerably depending on the country's energy mix.
Levels of government support, pricing mechanisms and taxation are also important factors, with countries such as France limiting increases in electricity prices. The EU has proposed a cap on Russian gas prices – requested for months by Italy and on the EU table on Friday 9 September – and a tax on energy companies to protect families and businesses, while many European countries have announced individual measures such as tax cuts. But the cost of electricity is set to rise across Europe this winter as high gas prices continue to impact the electricity market, while supplies from other sources are declining due to widespread maintenance problems at French nuclear power plants and drought affects hydroelectric energy. But let's see in detail ranking of European countries with the highest electricity and gas bills in August 2022.
Europe, residential energy prices as of 1 August 2022
Depending on where a customer lives in Europe, the electricity price (after tax) can vary almost 8 times. If we include Kiev, the price changes by 12 points. London and Copenhagen are by far the most expensive cities for domestic customers in Europe, followed by Rome, Amsterdam and Brussels. Kiev seems to have the cheapest electricity prices, followed by Belgrade, Budapest and Podgorica. In nominal terms, energy prices in Central and Eastern European (CEE) capitals tend to be below the European average; Prague, Riga and Tallinn are the only capitals among the CEE countries where the price of electricity is higher.
Residential electricity prices including taxes
The survey shows that on average energy (the contestable price component) accounts for 64% of the end-user electricity bill price, distribution 19%, energy taxes 4% and VAT 13% in Europe.
If we focus on the cost of energy as a commodity, Hepi's analysis shows that in Budapest it currently accounts for only 14% of the final price of electricity for the user, the lowest of all the cities analysed. In reverse, Nicosia e Roma they have the highest percentage of energy, reaching 82% of the final price in August 2022.
Also, as of January 2020, a consumer in Amsterdam pays no energy tax due to the increased tax credit. Instead, it receives a refund on the amount of the excess tax credit, in order to encourage consumers to electrify and switch away from heating and gas appliances.
Residential gas prices
As of August 1, 2022, the highest price is paid by the inhabitants of Amsterdam, who pay more than 2 times the European average price for end users, followed by Copenhagen, which is the second most expensive capital city. Stockholm it is currently the third. This can be explained by the nature of the Swedish gas market: there are 95.000 domestic gas customers throughout Sweden, 61.000 of them in Stockholm.
Prices in Amsterdam are more than 13 times higher than in Budapest, which is the cheapest city for gas in the EU, and almost 14 times higher if we include Kiev. Even more than electricity, natural gas for domestic use is generally cheaper in CEE countries.
Natural gas retail market prices marked a significant increase in August across Europe, continuing the upward trend observed since the beginning of the year. Sofia, Athens, Brussels, Copenhagen, Tallinn, Prague, Dublin, Madrid e Riga reached new highs, while gas prices remained at the levels of previous months in some of the capitals studied, due to various government interventions adopted to halt the soaring prices. However, current prices remain shockingly high compared to a year ago. High retail gas prices reflect extremely high wholesale prices, due to shortages of adequate supplies, increased demand for natural gas in an attempt to fill storage levels before winter, a constant fear of supply cuts, while the Russian invasion of Ukraine further impacted the markets.
For example, a Sofia there was a notable increase in prices, up 45% compared to July and more than 178% compared to a year ago. To Athens, the absence of gas discounts for households this month has led to prices soaring, some 41% higher than in July and more than 220% higher than a year ago, but the government has announced a intervention to support families starting from the beginning of next month, when demand will increase due to the approaching winter period. Finally, a Brussels, the price increase is linked to the fact that the UK pipeline, which carries large quantities of natural gas between the two countries, was completely shut down this month due to a breakdown.
