The price of energy was a bit of a handicap to Belgium in terms of its competitiveness, but increased competition and a price freeze have turned the tables.
A decision to freeze energy prices from April 2012 to January 1 of this year, helped reduce the inflation gap between Belgium and Germany. During this 8-month period, the price of gas and electricity dropped between 8% to 14%, depending on the market. As could logically be expected, there was a significant increase in energy bills in Wallonia at the end of the freeze period.
While the crude product represents 60% of the price of gas, it is under40% for electricity. In addition, the elimination of breach of contract indemnities has strengthened the market’s flexibility, and more open competition has played an important role as a regulator favouring the consumer.
Now, many providers have actually introduced lower energy prices, since customers may now freely change suppliers in order to choose the best rate based on their consumption. Could this be the end of oil indexation as requested by Minister of the Economy Johan Vande Lanotte?
Nevertheless, it’s a very positive boost to Wallonia’s attractiveness and competitiveness, significantly reducing the gap with the neighbouring regions.