Energy prices in Austria have skyrocketed, with costs for natural gas surging by over 160 percent between April 2021 and April 2024. These soaring energy expenses have been a significant driver of inflation in the country. They have also placed a heavy burden on households and companies, affecting their financial stability.
Despite the government's introduction of measures such as an electricity price brake, the issue remains unresolved.
According to the Austrian Institute of Economic Research (WIFO), the energy industry in Austria suffers from a lack of competition and the different expectations between politicians and the public owners of the energy companies.
"In the energy industry, there is a conflict of objectives that has not been taken seriously enough to date between the high dividends expected by public owners and the low electricity prices promised by politicians, as well as the extremely attractive salaries that employees in the energy industry are accustomed to", WIFO said, according to Die Presse.
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"Competition has so far fallen by the wayside in Austria, and consumers have paid for this through (excessively) high energy prices"," WIFO added.
What can the government do about this?
The centre-right ÖVP and Greens coalition wants to approve an amendment to ensure more competition in the sector.
The proposed amendment by the ÖVP and Greens coalition aims to foster more competition in the sector. Under this plan, providers of electricity, district heating, and natural gas that are significantly more expensive than their competitors will be required to justify their high prices. Failure to do so will result in a decision by the cartel court.
The liberal party NEOS told Die Presse that the amendment was not enough. They call for the country's competition authority to be strengthened and more price authority with monthly reports.
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The amendment would "not end the dominance of the provincial energy suppliers, who do not pass on the lower energy prices", Neos energy spokesperson Karin Doppelbauer said. This "unholy alliance between state-controlled energy companies and the public sector endangers purchasing power and prosperity in Austria."
However, according to WIFO, Austria still needs to fortify its economy against another fossil fuel price shock. The report underscores the potential benefits of this transition, stating that it can only be achieved by enhancing resilience and swiftly transitioning to a climate-friendly economy.
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