Your Guide to Better Understand and Navigate Energy Price Increases

The Tunisian Company of Electricity and Gas (STEG) has begun to apply a new pricing rate at the billing level of electricity and gas.

No surprise there, as the Russia-Ukraine conflict is having a big impact on energy prices worldwide. The World Bank estimates a 50% rise in energy prices this year (2022).

In this blog post, we explain what the recent increase means for customers and their electricity bills, what’s behind it, and what can you do to minimize the damage.

The New STEG Electricity Rates

With an average increase rate of 12% on electricity billing for all those whose consumption exceeds 200 kilowatt-hour per month, here are the updated billing rates:

For low voltage customers:

• 176 mill/kWh for the range of consumption of 101-200 kWh/month for residential buildings and 195 mill/kWh for non-residential buildings.
• 218 mill/kWh for the range of consumption of 201-300 kWh/month for residential and 240 mill/kWh for non-residential.
• 341 mill/kWh for the range of consumption of 301-500 kWh/month for residential and 333 mill/kWh for non-residential.
• 414 mill/kWh for the range above 501 kWh/month for residential buildings and 391 mill/kWh for non-residential buildings.

“ Let’s put this into practice. For example, if you’re subscribed to low-voltage and you own a building that consumes 500 KWh monthly, your annual energy bill will go up from 1731,6 Tunisian Dinars to 2352,7 Tunisian Dinars.”

Still, it’s important to state that only around 15% of consumers will be impacted by this price increase, representing nearly 650 thousand customers.

Let’s take a step back in time.

The last increases on the Tunisian electricity and gas bill go back to September 2018, with a 13% rate, and to June 2019, with a 12 to 15% increase rate.

But since the increase in 2019, every time the price of a barrel of oil rises, an increase in electricity rates is mentioned.

Needless to say, expect another increase in electricity and gas rates in the near future (and your supplier is not to blame).

Here’s why.

Why are electricity and gas prices moving up?

On a global scale, the main drivers behind the energy price increases have been the rapid post-Covid economic recovery and the Ukraine crisis.

The impact of the Covid-19 pandemic on energy prices has been huge.

Simply put, many industries and events have been forced into the deep freeze over the last couple of years, due to lockdowns and social restrictions.

This led to a decrease in global energy demand, and as demand fell, supply followed.

Later, as activity limitations began to ease, demand jumped back up. This sudden increase made it difficult for supply to match the rise in demand. And this is why energy prices went up.

Evolution of energy prices worldwide 
Source: IEA

Moreover, the Russia-Ukraine Crisis has been a disruption for the global energy market.

Major countries from all over the world have a big energy dependence on Russia (The EU imported around 40% of its natural gas from Russia in 2019).

Countries in the MENA region are being affected too, as Morocco prepares for an increase in energy prices.

From a local point of view, Tunisia’s Natural Gas supply might be getting tricky.

As you probably know, Tunisia imports a large part of its Natural Gas — which represents our country’s main source for electricity production —  from Algeria, through the Trans-Mediterranean pipeline. Lately, there has been widespread speculation regarding possible changes in Algeria’s gas supply conditions to Tunisia.

As you can see in the above graph, Tunisia’s dominant source of electricity production is Natural Gas (95,93% share in 2021).

This number implies that gas price volatility and any potential supply shortage will require adjustments, which will consequently have a big impact on electricity prices.

“Gas prices keep rising, taking electricity prices with them, and it might come down to the one thing we always stress about… Energy Efficiency. ”

Energy Efficiency: The Invisible Fuel

Over the last two years, energy prices have reached an all-time high. These unprecedented numbers are not showing any signs of slowing down with all that’s going on on the political side.

This is why our need for energy efficiency is growing rapidly, as it should be.

Saving energy and using it more efficiently need to be the major priority of every business and every individual. We all need to use the current energy crisis as a window of opportunity to make use of the energy efficiency solutions that are out there.

Nowadays, the energy we do not use can be as impactful as the energy that we do. For example, commercial and industrial buildings can record up to 30% of energy waste.

And while many energy experts are focused on finding new energy sources, a lot can be achieved using the energy that we have more efficiently.

This energy price volatility may well be the turning point that pushes us to finally become more energy conscious. The potential reward is huge.

“Energy savings are the quickest and cheapest way to address the current energy crisis. When paired with efficiency measures, they can reduce prices and our energy bills.”
 The European Commission, REPowerEU Plan, 18/05/2022

Are you starting to feel the pinch of soaring energy costs? Have you made any adjustments to your building’s energy efficiency as a result of higher energy costs?