Gas and petrol, the risks of a new bloodletting

The profound crisis that has been raging in the Middle East for weeks now risks having very serious repercussions for the pockets of Italian and European consumers. Already in the aftermath of the ferocious attack …

Gas and petrol, the risks of a new bloodletting

The profound crisis that has been raging in the Middle East for weeks now risks having very serious repercussions for the pockets of Italian and European consumers. Already in the aftermath of the ferocious attack launched by Hamas against Israel, the Minister of Business and Made in Italy, Adolfo Urso, had warned citizens about the possibility of possible increases in gas bills and fuel prices. A script in some ways similar to that already seen after the Russian invasion of Ukraine, with the possibility that, moreover, the energy imbalances connected to the Middle Eastern crisis could prove to be even more impactful for European countries than those resulting from the conflict on land Ukraine.

The outbreak of the Russian-Ukrainian war had in fact already contributed to negatively impacting all the countries of the Eurozone, with Italy hit by an energy crisis which meant for families, throughout 2022, an increase of 108% compared to the previous year as regards the electricity supplies, as well as a 57% increase, again compared to the year 2021, for gas supplies. In total, price increases in the energy sector have affected over 70% of overall inflationary growth, and this, despite the fact that government measures on energy have contributed to mitigating the dynamics of consumer prices by over one percentage point, as highlighted by Bank of Italy .

The exponential rises in energy prices have thus contributed to progressively eroding the purchasing power of Italian consumers, now threatened by a further crisis which, as we were saying, could lead to even more disastrous economic consequences for citizens’ pockets. Just a few days after the outbreak of the Middle Eastern crisis, gas prices on international markets had risen by approximately 34%an increase which, if it remained such, would already determine in itself an additional expense of 355 euros on an annual basis per family under the heading “energy raw material supply”, as underlined by Codacons.

According to the first estimates made by the association that protects consumer rights, in fact, the average gas bill could increase by 210 euros, while that of electricity by 145 euros, with an overall increase of 17% compared to the current tariffs. Not only. Fuel prices also risk adding to the increases in energy prices. After a period of decline, it could in fact register a new surge in oil prices as a direct result of the war in Israel. An increase which, needless to say, would be passed on directly to distributors and, consequently, to families. In the phase before the start of hostilities in the Middle East, the price of crude oil had fallen below the threshold of 80 dollars a barrel, only to then increase, reaching almost 90 dollars, a few hours after the Hamas attack.

After an initial surge, the price of crude oil now seems to have retreated, however, it is still early to claim victory. Oil prices could in fact record a drastic increase in the weeks to come, especially if the war continues for a long time, or, even worse, if it spreads to other countries in the Middle East. Without forgetting, then, the possibility that the United States and the European Union could decide to impose sanctions and embargoes on Iran, accused of supporting Hamas. Which would entail an immediate repercussion on crude oil priceswith a reduction in Iranian oil exports and a consequent surge in Brent prices, which, according to analysts’ estimates, would inevitably go well above 100 dollars a barrel in the short term.

In this context, among other things, the “uncertainty” factor would play a central role, with oil and gas which, being perceived as “risky”, would soon become the subject of speculations, thus triggering a mad rush to grab supplies in order to avoid, or at least limit, the potential effects of future crises. In such a scenario, the rise in prices could be such as to cause crude oil to skyrocket even higher the monstrous figure of 150 dollars a barrel, which in practical terms would mean petrol permanently above 2.3 euros per litre. A real one a drain on families and consumerswho would find themselves forced to bear the weight of the Middle Eastern crisis in their own pockets, after having already suffered, in the previous months, that of the conflict in Ukraine.

The issue ofenergy autonomy. After the Russian invasion of Kiev, instability in the Middle East exposes us to new risks related to supplies. In fact, Europe has high levels of energy dependence, ranging from 55% to 70%. Italy, for its part, records an even higher dependency rate, close to around 80%. And if it is true that in recent months Rome has tried to loosen the energy link with Russia, on the other hand, we still remain linked to both the Middle East and North Africa. Right on the other side of the Mediterranean, other problems could soon arise for our country. Algeria is in fact Italy’s main supplier of natural gasfor approximately 36% of the total cubic meters imported, and at the same time one of the countries closest to Hamas. This ambiguity too, needless to say, could have a significant impact on the energy issue in the months to come.

Now, if all the main sources of supply suddenly become uncertain, and the alternatives consequently particularly expensive, it is urgent to promptly seek other solutions (nuclear?) that can allow us to free ourselves from today’s energy subjection. Because, if there is one thing that the two conflicts currently underway should have taught us, having fortunately not suffered the tragedy of war firsthand, it is that depending energetically on others can reveal itself (and it promptly reveals itself) quite dangerous (as well as excessively onerous).