Due to impending shortages, gas has risen enormously in price in a short period of time. The average price for supplied gas has already risen by 15 percent this year. According to economists at ABN Amro, especially companies that consume a lot of energy and have thin profit margins are in trouble. For example, companies in greenhouse horticulture, heavy industry and the food industry.
Wipe out profit
But there are more energy-intensive industries that are in trouble because they see the energy costs rise sharply. Think of chemical companies, paper and cardboard companies and the building materials industry. All of them are vulnerable to higher energy costs, which can wipe out their profit margins.
Although exact figures are not known, because a concluded energy contract is competitively sensitive company information, these companies would generally use variable contracts. As a result, they feel the pain in a relatively short period of time. According to the bank, large consumers who have fixed their rates often do so for a few months, so that they will still have to deal with higher costs in 2022.
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As consumers, we will eventually notice this in the form of more expensive products and possibly also scarcity on the shelves.
Preventing red numbers
“Entrepreneurs who sell building materials will probably pass on their higher energy costs to avoid red numbers,” ABN Amro economist Madeline Buijs told RTL Z. “These are products that use a lot of gas, such as steel, cement and concrete, but for example, also foodstuffs, which can become more expensive and become scarcer when production is reduced.”
They see the same development at Rabobank. “If a tomato grower in the Westland has to take out a new energy contract at the significantly higher prices, we will also partly notice this in the supermarket,” says economist Hugo Erken of Rabobank. “Another example is the meat industry: they too may soon pass on their higher energy costs to the consumer.”
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Because everything is becoming more expensive, the earlier forecast of inflation by the Central Planning Bureau of 1.8 percent for 2022 can almost certainly go in the trash. Rabobank expects inflation for next year to rise by at least one percentage point at the current high gas prices.
Inflation up
Erken: “It is almost inevitable that we are already seeing the higher gas prices reflected in the inflation figures this year. You will get an extra blow next year if prices remain high.” Because although Russian deliveries can bring the gas price down in the short term, Rabobank, like ABN Amro, is counting on a structurally higher gas price.
As a result, both companies and consumers ultimately end up paying more. “This is certainly a worrying situation,” says economist Buijs of ABN Amro. “We have already seen many prices rise, and this is on top of that. That also indicates the need for sustainability, because entrepreneurs who have invested in solar panels, for example, are now reaping the benefits.”
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The government’s compensation scheme announced on Friday, which will free up an average of 400 euros per household and 500 million euros for smaller companies, is not enough, she says. “In a normal year alone, companies use about seven billion euros in gas and electricity. Then 500 million is a nice bonus because it can dampen the effects somewhat, but it will not solve all problems.”
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