The increase in electricity costs is not limited to the bill itself. Higher energy costs are gradually being passed on to products and services
With Brent crude having surpassed and remaining above the $100-per-barrel mark in September, the first cost increases have already hit households’ wallets. The rise in fuel prices is the first we’re seeing in our daily lives, while in the coming period, pressure from the energy sector is also expected to feed into prices, with food and electricity taking center stage.
For a household with an income of up to 1,500 euros per month, the situation is becoming even more difficult. When the bulk of one’s income goes toward basic necessities that cannot easily be cut back on, even a relatively small increase in prices immediately translates into a loss of purchasing power.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Drawing on the experience of the summer of 2022, when Brent crude had already surpassed $100 per barrel amid intense geopolitical turmoil, we are attempting an initial assessment of what this new wave of price hikes might mean for households.
The picture that emerges concerns three of a family’s most basic expenses: fuel, food, and electricity. We are not factoring in other expenses, such as coffee, clothing, or dining out, nor any potential burdens from interest rates. This is, therefore, an initial and rather conservative assessment of the pressure being created.
Fuel: the burden is already being felt in people’s wallets
When it comes to fuel, the increase is already evident. The average price of 95-octane unleaded gasoline is around 1.64 euros per liter, up from about 1.40 euros when Brent crude was in the 75–80-dollar-per-barrel range.
The difference of 24 cents per liter represents an increase of about 17%. For a household that consumes 150–180 liters of fuel per month, this means an additional 36–43 euros each month just for fuel.
Food: The pressure isn’t over yet
When it comes to food, the picture is more complex. Prices have already come under pressure, and the new energy costs are adding yet another burden.
According to a report in *Politi*, grain prices have risen by 25%–30% since the beginning of the year, while for staple products such as bread and baked goods, price increases are estimated to reach or even exceed 10%.
Higher fuel prices add costs to both production and transportation. And the higher these costs become, the greater the pressure to pass them on to final prices. For a household that spends about 600 euros a month on groceries, a 10% increase would mean an extra 60 euros each month.
Electricity: the next major front
The third front is electricity. The November–December period is likely to begin reflecting part of the impact of the high oil prices recorded in September.
Based on the experience of 2022 and calculations for the new fuel costs, the final price per kilowatt-hour could rise to significantly higher levels. For a household consuming approximately 1,000 kWh every two months, this means the electricity bill could increase by several tens of euros.
And this is where one of the biggest problems lies: the rise in electricity costs isn’t limited to the bill itself. Higher energy costs are gradually being passed on to products and services through increased production and transportation costs.
Purchasing power under pressure
So, if fuel prices remain at current levels and the projected increases in food and electricity prices are confirmed, the additional burden on an average household could reach or even exceed 1,500 euros annually.
For lower-income households, this amount is by no means negligible. It is money that leaves the family budget every month with no easy way to cut back, since it goes toward fuel, food, and electricity.
And most importantly: this estimate covers only three basic categories of spending. If we add in the rest of the daily necessities, the actual pressure on households’ purchasing power may be even greater.
