Electricity and gas prices fell last year in the EU, after the explosion in 2022. Romanians pay prices below the EU average in absolute value, but for electricity they pay one of the highest prices relative to purchasing power

Electricity and gas bills fell in the second half of 2023 after rising before Russia’s war against Ukraine and soaring through 2022, Eurostat data show. In absolute terms, Romania pays prices below the EU average, both for electricity and natural gas. But relative to purchasing power, things are changing, at least in terms of electricity prices.

In the second half of 2023, average electricity prices for household consumers in the EU decreased (€28.5/100 kWh) compared to the first half (€29.4/100 kWh) and increased slightly compared to second half of 2022 (28.4 EUR/100 kWh). The cost of energy, supply and network, which stabilized in the first half of 2023, shows a decrease in the second, but remains at high levels compared to the cost before the price peak in 2022.

The average price of natural gas for households in the second half of 2023 decreased (€11.3 per 100 kWh) compared to the first half of 2023 (€11.9 per 100 kWh) and the second half of 2022 (11, 4 EUR per 100 kWh). The decline in energy, supply and network costs, already started in the first half of 2023, continued its downward course. For non-household consumers, this decline is more pronounced, which shows better conditions for the industry.

Romanians pay low prices, in absolute terms

Romanians pay prices below the EU average for electricity and natural gas, in absolute terms. More precisely, a Romanian consumer paid around 0.18 euros per KWhin the second semester of 2023, respectively about 0.80 lei / KWh.

Electricity prices in the second half of 2023 were highest in Germany (€0.4020 per KWh), Ireland (€0.3794 per KWh), Belgium (€0.3778 per KWh) and Denmark (0.3554 EUR per KWh) – see figure 1. The lowest prices were observed in Hungary (EUR 0.1132 per KWh), Bulgaria (EUR 0.1192 per KWh) and Malta (EUR 0.1279 per KWh). For German households, the cost per KWh was 41% higher than the EU average price, while households in Hungary, Bulgaria and Malta paid less than half the EU average price.

Romania is also among the countries with the lowest average household gas prices in the first half of 2023, along with Hungary and Croatia.

Relative to purchasing power, Romania has one of the highest electricity prices

But if we look at the relationship to purchasing power, Romanians pay one of the highest prices in the EU for electricity, while the price for gas is close to average.

Expressed in euros and relative to purchasing power, average electricity prices for household consumers in the second half of 2023 were the highest in Germany (40.2 euros), Ireland (37.9 euros), Belgium (37 .8 euros) and Romania (33.49 euros). Conversely, prices were lowest in Hungary (11.3 euros for 100 kWh), Bulgaria (11.9 euros) and Malta (12.8 euros).

For gas, expressed in euros and relative to purchasing power, the average prices for households in the first half of 2023 were the lowest in Hungary (3.3 euros for 100 kWh), Croatia (4.6 euros) and Romania ( 5.6 euros) and the highest in Sweden (20.7 euros), Ireland (16.4 euros) and the Netherlands (24.8 euros).

Gas prices for household consumers fell in the second half of 2023, mainly as a result of lower energy costs and, to a lesser extent, taxes, which gradually return to pre-crisis levels after the cuts in 2022. For non-household consumers, gas price reductions were more evident in the second half of 2023.

Between the second half of 2022 and the second half of 2023, gas prices (in national currency) increased the most in Lithuania (+68%) and decreased the most in Denmark (-39%). For household consumers, a total of 12 countries reported increases, while the remaining 12 gas users reported price decreases. In the industrial sector, all but three countries reported decreases, indicating a clear downward trend in gas price levels.

Poland (+32%), Slovakia and Germany (both +22%) saw the biggest price increases, while Greece (-42%), Denmark (-41%) and Bulgaria (-40%) the biggest drops.