Electricity costs could soar by 60% next year, with an increase of up to 17% predicted for gas prices, warns the national statistics office.
According to STATEC's latest inflation forecasts, prices are set to soar if the energy price cap is not extended beyond the end of this year. Without additional government measures, inflation could hit 3.3% again in 2025.
When asked, Minister of the Economy Lex Delles said he planned to submit a proposal to the Council of State over the coming weeks, with measures to mitigate the expected increase; however, Delles did not provide details on the proposal's contents.
When asked if the CSV-DP coalition would prefer to take more socially graded measures, Delles said the previous government had attempted to strike a balance between increasing purchasing power and cutting inflation. But getting inflation under control, he said, would only be possible by tackling energy prices in general.
Delles emphasised that the measures introduced by the last tripartite had been part of a solidarity package, without which gas prices would have been 34% more expensive in 2022, 60% in 2023 and 29% in 2024, according to STATEC calculations. Electricity would have been 65% more expensive last year. Without the tripartite measures, STATEC estimated Luxembourg would have experienced seven more indexations from March 2022, instead of the four which have taken place since then.
In 2023, the price cap on gas cost the government around 202.5 million euros, while the electricity cap cost 108.5 million. This year, an estimated 65 million euros will be budgeted to keep gas prices down for consumers, with a further 224.5 million euros for electricity.
As it stands, inflation levels are reducing. In January, the yearly rate stood at 3.4%, as STATEC revised its 2024 forecast down to 2.2%.
As a result of this, the next indexation would be unlikely to occur until 2024's fourth quarter. Without additional measures to combat energy prices, the next index tranche would be due in the third quarter of 2025.
