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Gas bills set to soar in Austria

A worldwide hike in gas prices is set to be felt in Austria.

Gas bills set to soar in Austria
Austria's Federal Government has announced a plan to boost the country's strategic reserve of gas. Photo by Ilse Driessen on Unsplash

People who buy their household energy with a contract which is based on the monthly wholesale price will notice their gas bills increasing steeply in Austria, broadcaster ORF reports. 

The gas price index (ÖGPI), which is calculated by the Austrian Energy Agency, is five times as high in September as it was a year ago, which reflects the situation on the global gas market as the world recovers from the Covid-19 pandemic.

Gas prices have surged around the globe, with the burden being placed on consumers in several countries. 

Germany has already reported an increase in gas prices for autumn and winter, but in Austria price increases in the standard tariffs have not yet been publicly announced.

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Karina Knaus, head of the Center for Economics, Consumers and Prices at the Austrian Energy Agency, told broadcaster ORF that it could be assumed prices would rise in Austria as well.

“Since the price movements of the past few months have been very pronounced and unusual and there is currently no trend reversal in sight, it can be assumed that prices may rise here in the coming weeks and months as well.”

Knaus however said sharp spikes should not be anticipated. 

“In general, household gas prices in Austria are rather sluggish, so temporary and short-term movements on the wholesale market – neither upwards nor downwards – are usually not Immediately passed on to the households, since procurement in this segment is also long-term.”

The reason for the higher prices was a greater than usual demand during the pandemic, which has cut into gas supply. 

Prices are not expected to go down until the spring of 2022. 

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COST OF LIVING

Ten percent: Why are bread and pastries becoming more expensive in Austria?

In the coming months, the cost of bread and pastries will increase in Austria, putting an end to the 15 cent semmel.

Ten percent: Why are bread and pastries becoming more expensive in Austria?
Baked goods like bread and pastries are going up in price in Austria. Photo by Wesual Click on Unsplash

Although bread is a staple part of the diet in Austria, the cost of grain is rising.

This means customers will have to pay up to 10 percent more for bread as farmers offset the cost, with prices expected to increase from the autumn.

Other factors impacting the price of bread and pastries are increased maintenance costs for baking machines, the higher standard consumption tax for small delivery trucks and the expansion of parking stickers in Vienna.

Why is the cost of grain rising?

The frequency of storms in Austria in recent months has hit agriculture hard.

Across the country, crops have been damaged by hail and heavy rain, leading to a reduction in the yield of wheat per hectare.

READ MORE: Seven steps: How to reduce your climate impact as an international resident

Another problem is that grain is not a key crop in Austria, with farmers preferring to grow corn and beets – both of which have higher profit margins. 

Combined with the damage to crops from the storms, this means there is less wheat available than usual, which is causing the price to rise. 

What about other ingredients?

The cost of milk and butter – key ingredients for pastries – is also rising.

According to the Kronen Zeitung, dairies are demanding five to six percent higher prices due to delays with sourcing packaging and the rising cost of logistics.

The Food Industry Association (Verband der Lebensmittelindustrie) has described it as a “dramatic market situation” with historically high prices and no sign of a reduction. 

Labour shortages and higher wages

Another piece of the puzzle is that the baked goods industry is experiencing a labour shortage due to low starting salaries and poor working conditions.

As a result, from October 1st higher wages will be rolled out across the industry, with wages expected to go up by more than 2.1 percent.

On average, half of a baker’s costs go on staff, with that increasing for craft bakeries that produce a smaller amount of bread than commercial operations.

READ ALSO: What are the top jobs for international residents in Austria?

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