Overriding the price signals would thwart the goals of reducing dependence on oil and gas and reducing CO2 emissions. More important would be targeted, and therefore generous, help for low-income households, said the IHS experts Klaus Weyerstraß and Sebastian Koch on Friday. Making fuel cheaper would create undesirable false incentives, Weyerstrass pointed out to the price cap in Hungary, which leads to tank tourism. It is more important to change the energy supply “if we want to get out of this dependency,” said Koch. A VAT reduction would be “much too imprecise”. “The richer households, which consume a lot of energy, would benefit,” and politics would lose its steering effect, said Koch in a video conference with journalists.
On a technical level, according to Koch, one could also consider whether and how one could succeed in decoupling the electricity price from the gas price more. At present, the high price of gas in particular would cause the high electricity costs.
The high energy prices in this country are currently the most noticeable effects of the Russian invasion of Ukraine. Assuming that nothing is exported to Ukraine, Russia and Belarus for a year, according to IHS economist Alexander Schnabl, the war will cause a loss of value added of around 4 billion euros, which is 1.14 percent of gross domestic product (GDP) and corresponds to the work output of around 44,000 employees. This also includes indirect exports via other EU countries such as Germany or Italy.
According to Schnabl, the war itself has had less of an impact on Austria’s economy than the sanctions against Russia and Belarus. This is because trade with Ukraine is less developed. The failure of Ukraine causes only about a fifth of the total estimated value added losses. Conversely, this means that the sanctions will hit the Austrian economy four times harder than the war itself.
Mainly machines and vehicles as well as chemical products, mainly pharmaceuticals, are exported from Austria. A bigger problem than the export side, however, is the import side, where Austria is much more dependent, which is now also reflected in the uncertainties and the high energy prices.
Problems could arise in certain industries if there are disruptions in the supply chain. An example of this is the wiring harnesses for the automotive industry, which are manufactured in Ukraine. The IHS experts expect strong effects on the global agricultural commodity markets. The very likely crop failure in the Ukraine is already leading to high price premiums for wheat, corn and rapeseed.
When it comes to energy prices, Koch assumes that the prices for petrol and diesel at filling stations will fall again next week after the price of oil has already fallen again. The situation is similar with the price of electricity, which reacts with a time lag to the falling gas prices. Historically, oil prices are not exceptionally high, prices were already at a similar level in 2014, and even higher when adjusted for price. The difference this time is that fuel prices were very low during the corona crisis and the increase was therefore particularly steep.
Source: Nachrichten
