2023-07-24 18:05:21
The war in Ukraine shot up natural gas prices to unprecedented levels and forced the entire economy to tighten its belt to sharply reduce global consumption. Spain was no exception despite the fact that its dependence on Russian gas is much less than that of other European partners, such as Germany, and consumption fell drastically during 2022 in companies and households, but with clear differences.
On the business side, industry, large corporations and SMEs drastically reduced their demand for gas from April 2022, when prices skyrocketed due to the outbreak of the conflict at the end of February. And the Bank of Spain confirms that this lower consumption was maintained during the first four months of 2023 motivated by the improvements in energy efficiency and investments in renewable energies that companies have had to carry out to minimize the impact of the rise in prices that, on occasions, have caused their operating costs to double from one year to the next.
Therefore, it is understood that this collapse in demand may be “structural” and be sustained over time. In an article published this Monday by the agency on the demand for gas in the period 2022-2023, it assures that, probably, this demand will not recover despite the fact that gas prices have fallen again from the highs of last year to their historical levels.
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Within these global figures, different evolutions were observed by type of sector, since the refining industry, for example, was the one that reduced its demand for natural gas the greatest proportion, followed by factories linked to the cogeneration of electricity, paper and chemicals/pharmaceuticals, reveals the bulletin.
However, the family dynamics have been different. Although it is true that in the second half of last year gas consumption fell historically, the Bank of Spain notes that the levels recovered in the first four months of this year (between January and April) as a result of the reduction in the price of this raw material.
The drop in gas demand was more temporary than in the case of Spanish companies, especially in the last stretch of last year when prices did not stop rising. In addition, the report stresses that the rise in prices was less pronounced in households than in companies due to the measures applied by the Government in its anti-crisis plan.
TUR and VAT
Among this aid package, the one that has made it possible to cushion the payment of exorbitant gas bills the most has been the extension of the regulated tariff (TUR) from October last year until now, which has represented a reduction in the average price of gas of up to 30% with respect to what these families would have paid without applying the discount regulated by law. In addition, the TUR was extended to neighboring communities with boilers to prevent what was going to be a harsh winter from breaking their budgets and pockets.
However, finally the end of the year 2022 and the beginning of this year have been warmer than usual in terms of temperatures and meteorology. With a milder winter, the use of gas has been much lower in homes, since they do not have to activate the heating as many times, but also in companies, where they have not needed to increase their consumption as much as expected.
In fact, sources from the energy sector make a point to the Bank of Spain report, considering that these more benign temperatures have allowed them to reduce the use of natural gas in their facilities. And that, beyond the efficiency measures to which the supervisor refers, business and industrial savings are mainly explained by the weather conditions last winter.
It was this cause that led to the contraction in the demand for gas by households, which did not need to put up heating as much as in other years in the second part of the year. “Throughout the first four months of 2023, consumption returned to its usual pattern in relation to temperature,” indicates the Bank of Spain.
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