Rising energy prices: suppliers withdraw fixed price contracts
The news broke on 30 September: in view of the unprecedented rise in energy prices, some suppliers have decided to temporarily withdraw their fixed price contracts – in order to help Belgian consumers, but there’s more to it than that… We take a look at the initiative.
Let’s recap: what is the reason for rising energy prices?
It’s been headline news in much of the Belgian media since the summer: electricity and gas prices are rising. And unfortunately, the situation is unlikely to be sorted out in the weeks ahead. In August 2021, the CREG (the Commission for Electricity and Gas Regulation) was already saying that, for variable price contracts, annual electricity bills had increased by €70 between 2020 and 2021 and gas bills had risen by €111 over the same period.
>> Fixed or variable prices? Which should you choose for your energy contract?
Why have prices risen so much? The inflation can be explained by several factors:
- The recovery in activity since the pandemic, which significantly increased demand for energy, especially as prices in 2020 were at a historic low;
- The high cost of the raw materials (coal, oil) needed to produce electricity;
- Bad weather and temperatures below seasonal averages, further increasing the need and demand for electricity, especially for heating;
- The reduction in gas storage in Europe, which has turned the continent into an importer rather than an exporter of gas, putting pressure on global energy prices.
Energy prices are forecast to rise further in the coming weeks, especially in October and November. The electricity price paid by suppliers may rise to as much as €207 per MWh, while that of gas may rise to €94 per MWh, .
