Electricity and gas prices are falling: how much will the population save as a result?

“The electricity rate for domestic consumers will decrease by 8%, to 1.2 cents per kilowatt-hour. This would save around € 10 per half year, depending on consumption, such as 100 kilowatt-hours.

If used for heating or hot water, the savings could be around 50 euros per month, ”he said on Tuesday at Delfi 11.

Gas rates for domestic consumers are decreasing by 15–23 percent, or 8 cents per cubic meter, said I. Žilienė.

“The fixed part of the rate does not change. For consumers who use gas for cooking, the rate would be reduced to 47 cents per cubic meter. The savings amount to about 5-6 euros per half year, because consumption is low,” said.

Consumers can save a little more.

“Consumers who use gas for heating or other purposes consume more than 300 cubic meters per year, the rate would be reduced to 28 cents per cubic meter. Here, the savings would be 50-60 euros per half year,” said the president of VERT.

He also explained that the main reason for the decrease in electricity prices was the decrease in electricity prices in the Nord Pool Spot exchange.

“Also for gas, the main reason for the decrease in prices is the decrease in the prices of raw materials,” said I. Žilienė.

The decrease is temporary.

Tadas Povilauskas, chief economist at SEB Bank, noted that electricity and gas costs represent around 3 percent. Medium consumption basket.

Some for many, others small, he thought. – In general, the decrease in the price of these resources in the country from July 1 will reduce inflation by approximately 0.3 percent. point. It’s still money in people’s pockets, not outside of it. “

The economist noted that € 10 for electricity or € 6 for gas increases the consumption of the population in other areas, which is good for consumption in an economy emerging from the coronavirus crisis.

He also said that prices are likely to be higher next year.

“We can thank coronavir because the economic recession caused by the pandemic has led to a significant drop in electricity consumption across the region. When demand falls, electricity prices fall,” said T. Povilauskas.

For his part, Žilienė did not dare to forecast prices in the future.

“When we establish new rates in November, they will take effect from January 1 of next year. We will assess the fact for 12 months. How much it will increase or perhaps decrease is difficult to say. Perhaps it will remain at the same level,” he said.

The VERT President also emphasized that the Council operates independently of political forces. “We assess costs objectively,” said I. Žilienė.