Slight rise in energy prices

19/02/2008 15:00

An average Dutch households paid 1.5 percent more for its gas and electricity in January 2008 than in the previous month. In spite of this their energy bill was nearly 2 percent lower than in January 2007. This was an effect of the sharp drop in energy prices in July 2007.

Energy prices

Energy prices

Sharp fall in energy prices in July 2007

Household energy bills were 4 percent lower in July 2007. Such a substantial decrease had not been measured since April 2001. The increase in January 2008 was much smaller, so net energy prices are still lower than twelve months previously. Prices of natural gas and electricity are partly based on oil prices in the preceding months. This is in contrast with the prices of motor fuels, where every change in the price of oil has an almost immediate effect on retail prices.
Energy prices are usually adjusted around January and July. Energy prices rise by relatively more than prices for other goods and services. The consumer price index rose by 17 percent between 2000 and January 2008, energy prices rose by 75 percent.

Gas costs more, electricity less

On the basis of the energy rates in January 2008, a household with an average energy consumption will spend 1,758 euro per year on energy. This is just over 26 euro more than in December 2007. The increase can be attributed to higher gas prices and an increase in energy tax. The reduction in energy prices cancelled out part of this increase.

Composition of energy price increase

Composition of energy price increase

Taxes account for one third of energy bill

One third of the energy price consists of VAT and other taxes. In the early nineties this was still only 17 percent. The delivery charges for natural gas and electricity account for nearly half of the price. Energy companies are free to set their own delivery charges. This part of the costs also reflects the effects of the rising oil prices. The remainder of the bill consists of transport costs, which are regulated by government.

Composition of Dutch energy bill

Cees van der Vlis