Europe collided with energy shock due to a sharp increase in gas and electricity prices, Bloomberg writes about it.
The cost of gas and electricity has sharply increased throughout the region, reaching record values in some countries. For example, in Germany, the wholesale prices for electricity this year soared by more than 60 percent. Business can not pay such accounts and have to raise prices for goods and services. Some businesses are close to closure.
Plans for decarbonization of the economy also play a role, since utilities pay big money for the permission necessary for them to produce energy from fossil fuels. Also affects the situation and the lack of gas. Russia supplies it less, and Asia buys the bulk of liquefied natural gas, which makes it difficult to replenish exhausted storage facilities after harsh winter.
Governments are afraid of a negative reaction, since higher accounts for utilities increase the negative in relation to the transition to energy. In addition, inflation in Europe increases as the economy is restored and raw material prices. Costs for consumers in the eurozone increased by 2.2 percent in July, which is the highest indicator since October 2018.
Meanwhile, the wholesale cost of electricity for industrial enterprises in Russia since the beginning of the year exceeded the figures for 2019. Prices approached the five-year record.