EU faces high energy inflation

Oil&Gas Materials 25 February 2022 14:06 (UTC +04:00)
EU faces high energy inflation

BAKU, Azerbaijan, Feb.25

By Leman Zeynalova – Trend:

Energy annual inflation in the EU reached 27 percent in January 2022 and continues to grow, Trend reports with reference to Eurostat.

The Eurostat data shows that following its lowest rate in five years in May 2020 (-11 percent), energy inflation started to increase but continued to show negative rates up until February 2021, varying between -9 percent and -1 percent. From March 2021, energy inflation was positive and increased almost continuously, reaching 26 percent in November 2021 and 27 percent in January 2022.

Reportedly, the inflation rate for energy is the highest since the Harmonised Index of Consumer Prices (HICP) was first published in 1997.

Gas reached its highest point in January 2022 at almost 41 percent, a 13.5 percentage point increase compared with the previous month, significantly above other energy sources - fuel (including petrol, diesel, liquid fuels and other fuels) at +26 percent (-2.8 pp) and electricity at +24 percent (+3.1 pp).

During the COVID-19 pandemic, inflation rates for fuel were more volatile than for electricity and gas. Inflation rates for gas and electricity hit negative values between April and December 2020, but were more stable, averaging -5 percent for gas and -1 percent for electricity. Fuel however hit a low point in May 2020 (-21 percent) and then peaked at +37 percent in November 2021.

Among the EU Member States, Belgium (67 percent) and the Netherlands (58 percent) registered the highest energy inflation rates in January 2022, followed by Lithuania (43 percent), Estonia (41 percent) and Greece (40 percent). At the other end, the energy inflation rate was 0 percent in Malta, with Croatia and Portugal following, both with 12 percent.

European energy prices soared amid the Russia-Ukraine crisis. Benchmark Dutch gas futures grew by 62 percent, the highest level since 2005. German power for March rose by 58 percent.


Follow the author on Twitter: @Lyaman_Zeyn