World

The INE meets this Wednesday with the electricity companies to review the calculation of electricity in the IPC | Economy

Headquarters of the National Institute of Statistics (INE), on Calle del Capitán Haya, number 51 in Madrid.
Headquarters of the National Institute of Statistics (INE), on Calle del Capitán Haya, number 51 in Madrid.Louis Sevillano

Inflation is the data of the moment: it is close to 10% year-on-year, reaching maximums not recorded in almost four decades. At these levels, it cuts the consumption capacity of households; it narrows the margins and profits of a good part of the companies, and all the updates of income, benefits or salaries are made taking into account how much is lost on the Consumer Price Index (CPI). That is why it is so important to measure it well, especially when Spain is seeing higher price increases than in the rest of the euro zone. Part of this gap can be explained by the regulated electricity tariff, which is directly linked to the wholesale daily auction price and, therefore, is much more volatile and is being much more affected by the rise in energy prices. To a lesser extent, other factors have an influence, such as the fact that energy weighs a little more in the Spanish shopping basket or that fuels have a lower tax burden in Spain and that causes the rise in raw materials to have a greater impact.

But another reason that is quite important and that the Government has been wielding is the way in which the National Institute of Statistics is measuring the price of electricity. Until now, the INE was only using the regulated tariff to calibrate the price of electricity in the CPI. But only 40% of households are at this rate directly linked to wholesale daily prices. The remaining 60% have contracted the free rate, whose prices are negotiated with the companies and are usually somewhat more stable, although in the long run they are generally more expensive than the regulated rate. That is to say, in principle, if these liberalized prices were incorporated, the increase registered since last summer would probably be lower. Hence, the Executive has insisted that this measurement be reviewed as soon as possible.

The president of the INE, Juan Manuel Rodríguez Poo, has indicated to questions from EL PAÍS that this Wednesday he will meet with the electricity companies to collect data that will allow him to recalculate the CPI taking into account the price of electricity in the free market. “We will meet with some suppliers to see what the status of our requests is because right now we don’t have the necessary data to do it,” he explained. Rodríguez Poo has not yet announced when they will be able to incorporate the information on the liberalized rates, but he hopes that the change “will manifest itself in the short term,” he pointed out.

According to experts consulted, the problem lies in the fact that companies have billing data but not price data. And in billing there are other variables that are not the price, such as the quantities consumed, the offers, the hours of the day, the revisions of the contract or the number of days to which they refer. To calculate the CPI including the free rate, the INE can only use the price data that the electricity companies have not provided until now.

In addition, the statistics of the electricity companies do not disaggregate between consumers who are companies and those who are families. And for the CPI only household prices can be used. Third, it is possible that the companies are dragging their feet because they don’t want to make their prices known. So the INE meeting will serve to check to what extent they want to cooperate.

Another question is whether the change would really serve to greatly modify the inflation data. The IPC is usually changed from time to time to redo the weights and the products included in the shopping cart. But never before has the series been corrected by incorporating new data to see how it had evolved before. In addition, the rise in prices in the regulated rate has already occurred and probably should not pick up any more. On the other hand, the free rate has yet to reflect the strong increase registered and, incorporating it, could cause the CPI to climb even more in the coming months. Consequently, it is not at all clear how it could be.

He knows in depth all the sides of the coin.

subscribe

The La Caixa research service has already tried to make an approximation of how much the inflation data would change when computing the free rate: last year, the annual average would have been one point lower, as calculated from direct debits in the entity. However, the INE criticized the study because the receipts do not distinguish between prices and quantities consumed. “The INE continues to work with the electricity companies with the aim of achieving a system that allows obtaining information that is adapted to the requirements of the CPI. Meanwhile, the index that is published is absolutely correct and enjoys all the national and international guarantees of precision and reliability”, concluded the note published by the statistical institute to respond to the numbers from La Caixa.

Exclusive content for subscribers

read without limits

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button