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Friday, October 22, 2021

Electricity and gas prices up. Lewiatan Confederation on the costs of entrepreneurs

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Europe is struggling with ever higher prices for consumer goods and services. This is a consequence of many mechanisms that occur simultaneously: inter alia, high gas and electricity prices, which translate into higher costs of economic activity, writes the economic expert of the Lewiatan Confederation, Mariusz Zielonka.

“Professor Adam Glapiński, President of the National Bank of Poland (Narodowy Bank Polski – ed.), During his last speech on the interest rate hike, informed that the move made by the MPC (Monetary Policy Council – ed.) Would not stop the price increase in Poland, as it is caused by external factors. Looking at the raging prices of agricultural products and fuels on the global markets, it is not difficult to agree with the president of the central bank “- wrote the Lewiatan Confederation expert.

Zielonka estimates that the future looks darker for us, because the price of a barrel of crude oil on the New York Stock Exchange increased by over 80% during the year, reaching the 2014 highs, i.e. exceeding the level of $ 80. a barrel.


Electricity and gas prices – the situation of entrepreneurs

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He adds that at the same time, the price of gas on NYMEX (New York Mercantile Exchange – New York Commodity Exchange – ed.) Jumped by 120 percent, exceeding the amount of $ 5. for the British thermal unit (BTU – ed.).

“The futures contracts for these two goods also leave no illusions, the prices will remain at the current level for the next quarter, which means an increase in operating costs for entrepreneurs. This time, probably higher than the level of the purchase price of the raw material. The prices of CO2 emission rights have an impact on the already speculative prices of raw materials. At the same time, the decarbonisation of economies increases the interest in alternative energy sources, including natural gas “- we read in the commentary.

According to Zielonka, entrepreneurs are also not in favor of international freight prices. “International shipping of a container, globally, is approaching $ 10,000 per container. At the same time, shipping from China to Northern Europe costs nearly $ 14,500. This can be seen very clearly in the increase in production prices. sold industry in Poland. Let us recall the main driving sector for the domestic economy “- he adds.

The Lewiatan Confederation expert noted that from the beginning of the year, the increase in prices in the industry each month reached new heights. “In August, prices were 9.5 percent higher than a year ago. At the same time, this is the highest result since March 2011. Similar increases are felt in the construction industry, where price increases also reach 10 percent.” – writes.

It estimates that, as a consequence, further price increases for consumers seem inevitable. “The mere maintenance of an apartment in an inflation basket is responsible for nearly 20 percent of the value of the entire basket, and another 9 percent is the cost of transport” – says Zielonka.

Russian gas in the European UnionPAP / Adam Ziemienowicz

Main photo source: Shutterstock

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