Analysis: Forget the shower, it’s eating or heating for shocked Europeans affected by the energy crisis

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  • Share of energy in household spending hits record highs in Europe
  • Rising bills force households to reduce their energy consumption
  • The crisis in Europe looks worse than in other developed economies

LONDON, Aug 26 (Reuters) – No more ironing, limited oven use and showering at work – Europeans are trying to cut their energy use, but bills keep climbing.

As wholesale gas and electricity prices rise, millions of people in Europe are now spending a record amount of their income on energy, the data shows.

In the eastern English town of Grimsby, Philip Keetley didn’t turn on his cooling fan at home as Britain suffered a record-breaking heatwave this summer.

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A look at his bank account showed he couldn’t afford it.

“The cost of living has gone up and yet you’re still expected to live on the expected money when there was no crisis… I can either heat up or eat,” Keetley said.

Citizens of other European countries are also voluntarily taking steps to reduce consumption as gas, electricity and fuel prices soar due to the war in Ukraine, sanctions against Russia and the aftermath of the coronavirus pandemic.

The benchmark gas price in Europe has soared 550% in the past 12 months. The cost of energy for British consumers will rise by 80% from October, regulator Ofgem said on Friday, taking average annual household bills to 3,549 pounds ($4,188). Read more

European governments have been rushing to offer aid, but data shows the aid has not made a significant difference for households.

This winter, Britons will spend an average of 10% of their household income on gas, electricity and other heating fuels as well as fuels for domestic vehicles, mainly petrol and diesel, double the amount in 2021, according to Carbon Brief calculations on official data.

This makes the current energy crisis more severe than those of the 1970s and 1980s. An oil producer’s oil embargo and the 1979 Iranian Revolution caused blackouts and long lines in service stations in the West. At the height of this crisis in 1982, people in the UK spent 9.3% of their income on energy.

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UK charity National Energy Action (NEA) estimates that 8.5 million UK households could be in fuel poverty after October when the UK cap rises, up from 4.5 million last October.

According to the NEA and other UK charities, a household is defined as living in energy poverty if they have low incomes and must spend 10% or more of their income on energy. The definition is unofficially used in other European countries.

“The increase in energy bills we are seeing is completely unprecedented,” said Peter Smith, Director of Policy and Advocacy at NEA.

“We believe these historical trends of lower-income households disproportionately spending more of their income on energy are still very evident.”

EAT OR HEAT

Keetley lost his job as a councilor in April and lives on 600 pounds ($706.44) a month through a social security scheme. Half of that goes to rent, he said, with the rest barely covering the essentials.

He now eats one meal a day and despite reducing his energy consumption to a minimum, he spends more than 15% of his income on energy bills.

A third of UK households have reduced the use of cookers and ovens, according to a study by the Financial Fairness Trust, a third have reduced the number of showers they take and half have lowered the temperature in their homes.

“People are doing a lot to try to get their bills down, but they’re still going up. That’s why we want to see more action from the government,” said Jamie Evans, senior research associate at the University of Bristol, which participated in the Financial Fairness Trust study. study.

Dawn White, who suffers from kidney failure, says she fears soaring energy costs in Britain will no longer allow her to pay for her life-saving treatment.

“Without my (dialysis) machine five times a week, 8 p.m., I will die,” White, 59, who lives in southeast England, told Reuters. Read more

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Gas prices for families in most major European economies at the start of 2022 exceeded the peak of previous crises in the 1970s, 1980s and 2000s, according to an inflation-adjusted index for households provided by the International Agency energy (IEA).

Europe seems to be worse off than other developed economies.

At the end of the first quarter, the OECD gas price index was still below the peak of previous crises.

IEA data from 1978 shows that although US households have on average paid higher prices for natural gas over the past four decades, the price of gas for European families will exceed US levels in 2022 .

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SHOWER AT WORK

In Turkey, gas prices more than doubled in July from a year earlier, while electricity prices jumped 67% year-on-year, according to data from the Turkish Statistical Institute.

Şeyda Bal, 27, in Istanbul, said she had limited oven use to three times a month to save energy. Her husband goes to work by bus to save fuel, even though it takes him three times longer.

In the European Union, Italian and German families are among the hardest hit by soaring gas prices, according to IEA data.

The average Italian family’s energy bills, mostly for gas and electricity, jumped to 5% of total household spending in July 2022, from 3.5% in 2019, according to data from the utility. economic research Prometeia. The July level was the highest since 1995 according to OECD data.

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In Europe’s largest economy, Germany, household gas bills more than doubled in July compared to 2021, according to data from price portal Check24, while heating oil prices for families with a terraced house rose 78% year-on-year in May.

Ercan Erden, 58, lives in the town of Nidda, northeast of Frankfurt, and works as a machine operator in a mineral water factory. “Now I shower at work after work and shave at work,” he said.

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($1 = 0.8493 pounds)

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Bozorgmehr Sharafedin, Canan Sevgili, Francesca Landini, Susanna Twidale, Stephanie Van Den Berg, Layli Foroudi, Robert Muller, Vera Eckert, Kate Holton, Inti Landauro, John Chalmers, Riham Alkousaa, Anna Koper, Marek Strzelecki, David Gaffen, Jan Lopatka, Scott DiSavino and Lucy Marks; Editing by Veronica Brown and Susan Fenton

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