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Roundup: Italy's businesses, consumers brace for hard winter as energy costs bite

ROME
2021-11-16 04:23

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ROME, Nov. 15 (Xinhua) -- Sitting in his office in the large clothing store he manages in the Italian capital, Roberto was checking the recent electricity bills on his computer.

He was trying to determine how much the cost of energy has risen lately and find out what small enterprises like his could expect as winter looms.

"The more consistent increase was announced in October, up to 40 percent they say, but I have yet to see that," the manager, who gave his first name only, told Xinhua.

"Yet, I have had an average 20-22 percent rise so far, and it came with the last two bills ... it is heavy for us retail businesses, we are still trying to make up for the pandemic-related losses."

According to Roberto, this uncertainty had a huge effect on his business planning -- plus he is a family man with two children, which means he has to consider the impact of the price hike on his household as well.

Roberto is obviously not alone: energy prices are surging across Europe, causing headaches for companies, entrepreneurs and consumers alike.

In September, Italy's Ecological Transition Minister Roberto Cingolani said that electricity prices rose by 20 percent in the third quarter of 2021 in the country, and warned that "Next quarter, they will rise by 40 percent."

The retail price of electricity for average households and micro firms has risen by 9.9 percent and that of gas by 15.3 percent since July 1, according to Italy's Regulatory Authority for Energy, Networks and Environment (ARERA). For small businesses, the respective figure is close to 20 percent.

The autumn months have then brought a new -- expected -- surge, which the Italian government tried to cushion by allocating over three billion euros (3.4 billion U.S. dollars) to minimize the impact on the energy bills of households and micro companies.

This enabled ARERA to waive the general charges on the bills of 35 million domestic customers and micro firms, reduce the value-added tax (VAT) on gas, and help more than three million families through discount bonuses.

The increase for the last quarter of this year was thereby reduced but would still be 29.8 percent and 14.4 percent for electricity and gas, respectively, the ARERA said.

For households and retailers, Italy's electricity and gas markets remain regulated until Jan. 1, 2022, when they will be fully liberalized.

In recent months, Confindustria, the country's main industrial association, has been holding talks with the country's ministers of ecological transition, economic development, agriculture and economic affairs.

"We might see the worst impact (of the surge) the next year. Much depends on how cold the winter will be," Ricci told La Repubblica newspaper in early November.

"Yet, if temperatures nosedive in January and February, the situation can get worse: certain energy-intensive sectors could not handle another 3-4 months of peak prices," he said.

Finally -- as energy prices push up inflation and families wonder how much to set aside -- there are fears that the behavior of consumers during the Christmas and New Year holidays will also be affected.

Back in October, and then again on Nov. 8, Confcommercio has warned spending could drop between 2.7 billion and 5.3 billion euros if the country's inflation rose to 3 percent and 4 percent, respectively.

In October, Italy's inflation rate rose to 2.9 percent from 2.5 percent month-on-month, according to the National Institute of Statistics (ISTAT).

"To be honest, the increase in our electricity and gas bills has been limited in the past four months, I would say three or four euros per month, which is not much," said Angela Tressa.

"Yet, one must consider the extra costs for the whole year, the new increases already announced ... so, yes, as pensioners, we might have to reduce our consumption during the Christmas holidays a bit," said the 67-year-old. (1 euro = 1.14 U.S. dollars)
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