- The share of energy in household spending has reached record levels in Europe
- Higher bills force households to reduce energy use
- The crisis in Europe looks worse than in other advanced economies
LONDON (Reuters) – No more ironing and limited use of the oven and showers at work – Europeans are trying to cut their energy consumption but bills keep rising.
Data shows that with rising wholesale gas and electricity prices, millions of people in Europe are now spending a record amount of their income on energy.
In the eastern English town of Grimsby, Philip Keatley didn’t turn his cooling fan on at home as Britain blazed under a record heat wave this summer.
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A look at his bank account showed that he couldn’t stand it.
“The cost of living has gone up, yet you are still expected to live on the money that was saved when there was no crisis … I can either turn on the heating or eat,” Keatley said.
Citizens in other European countries are also taking voluntary measures to reduce consumption as gas, electricity and fuel prices rise due to the war in Ukraine, sanctions against Russia and the consequences of the coronavirus pandemic.
The benchmark European gas price has risen 550% in the past 12 months. The regulator Ofgem said on Friday that the cost of energy for British consumers would rise by 80% from October, bringing the average annual household bills to 3,549 pounds ($4,188). Read more
European governments were quick to provide assistance, but the data shows that the aid has not made much difference to families.
This winter, Britons will spend an average of 10% of their household income on gas, electricity and other heating fuels as well as domestic vehicle fuels, mainly petrol and diesel, double the amount in 2021, according to Carbon Brief calculations of official data.
This makes the current energy crisis even more severe than that of the 1970s and 1980s. An oil embargo imposed by an oil producer and the Iranian revolution of 1979 caused blackouts and long queues at gas stations in the West. At the height of that crisis in 1982, people in the UK paid 9.3% of their income on energy.
The UK charity National Energy Action (NEA) estimates that 8.9m households in the UK could suffer from fuel poverty after October when it raised Britain’s cap from 4.5m last October.
A family is defined as living in fuel poverty if they are low-income and need to spend 10% or more of their income on energy, according to the NEA and other UK charities. The definition is used unofficially in other European countries.
“The increase in energy bills we’re seeing is absolutely unprecedented,” said Peter Smith, NEA’s director of policy and advocacy.
“We think those historical trends of low-income households spending disproportionately more of their income on energy are still very clear.”
Eat or heat up
Keatley lost his job as council counselor in April, and lives on 600 pounds ($706.44) a month from his Social Security scheme. Half of that, he said, is rent, and the rest barely covers necessities.
He now eats one meal a day and despite keeping energy consumption to a minimum, he spends more than 15% of his income on energy bills.
A study by the Financial Fairness Trust showed that a third of households in the UK reduced their cook and oven use, a third reduced the number of showers they used, and half turned down the temperature in their homes.
said Jamie Evans, senior research associate at the University of Bristol who was involved in the Financial Fairness Trust study.
Dawn White, who has kidney failure, says she fears rising energy costs in Britain mean she will not be able to afford her life-saving treatment.
“Without a machine (dialysis) five times a week, 20 hours, I would die,” White, 59, who lives in southeast England, told Reuters. Read more
Gas prices for households in most of the leading European economies in early 2022 exceeded the peaks of previous crises in the 1970s, 1980s and 2000s, according to the Household Inflation Rate Index provided by the International Energy Agency (IEA).
Europe looks worse off than other advanced economies.
By the end of the first quarter, the OECD gas price index was still below the peak of previous crises.
International Energy Agency data dating back to 1978 shows that although US households have paid higher average prices for natural gas in the past four decades, the price of gas for European households has exceeded US levels in 2022.
Bathing at work
In Turkey, gas prices more than doubled in July compared to the previous year, while electricity prices rose 67% year-on-year, according to data from the Turkish Statistical Institute.
Ms. Pal, 27, in Istanbul, said that oven use is limited to three times a month to save energy. Her husband commutes to work by bus to save fuel, though it takes three times longer.
Data from the European Union’s International Energy Agency shows that Italian and German households are among the hardest hit by rising gas prices.
Data from the economic research firm Prometia showed that the energy bills of an average Italian household, especially for gas and electricity, jumped to 5% of total household expenditures by July 2022, from 3.5% in 2019. The July level was the highest since 1995 based on OECD data. economic and development.
In Europe’s largest economy, Germany, household gas bills more than doubled in July of 2021, according to data from price portal Check24, while heating oil prices for families with an average porch home rose 78% year-on-year in May. .
Erkan Erden, 58, lives in the town of Nida, northeast of Frankfurt, and works as a machine operator at a mineral water plant. He said, “I shower now in the workplace after work, and I shave my hair at work.”
(dollar = 0.8493 pounds)
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