Going Up! Price Increases for 2024

The increase in the Value Added Tax (IVA) on electricity from the current 5% to 10%, which came into force this January 1, will mean an increase in the cost of the bill of about two euro per month, not too bad you might think, but that’s not the end of the story.

Other taxes linked to electricity will also be “modified” throughout the year. Specifically, the Tax on the Value of the Production of Electrical Energy (IVPEE) – currently suspended – will have a rate of 3.5% until March, going to 5.25% until June, and the Special Tax on Electricity (IEE) – now at 0.5% compared to 5.1% – will be set at 2.5% in the first quarter of the year and will go to 3.8%.

Regarding the fixed costs of the electrical system such as the charges – established by the Government -, they will remain at the same current levels for 2024, 55% below pre-war levels.

In the case of natural gas supplies, IVA will be at 10% during the first three months of 2024, while it will remain at that same level for biomass fuels for six months. Heat supplies will follow the same pattern, depending on their fossil or renewable origin.

The limit on the growth of the regulated gas tariff (TUR) is also extended – which prevents an increase in the cost of the raw material above 15%, limiting the quarterly increase to approximately 5% -, the existence of the TUR specific for neighbourhood communities and the maximum price of the butane cylinder of 19.55 euro. Specifically, the butane cylinder will start installed in 2024 at a maximum price of 15.14 euro, pending the review this January.

Meanwhile, the rate of last resort (TUR) for individual natural gas rises by 8.19% on average as of January 1, in relation to the price in force since the previous review on October 1.

Specifically, for an average customer TUR 1 (kitchen and domestic hot water) will mean an increase of 11.35% in their annual bill with taxes – with IVA, set for this first quarter at 10%, the increase is 21%, would have been 22.49% -, while for one of TUR 2 (kitchen, domestic hot water and heating) it will represent an increase of 12.69% in their annual bill with taxes – with IVA at 21% the growth would have been 23.95% -.

So, now we know that the price of electricity and gas will increase more than we thought, we have more bad news, because Movistar and Vodafone also increase their prices in 2024, 3.1% on average in the case of the first – taking into account all convergent and non-convergent rate changes – and 4.38% in the case of the second, whose update is in line with the average annual inflation calculated between October 2022 and September 2023.

As for Movistar, the price increase will apply from January 15, 2024, while in the case of Vodafone the increase will begin in the first quarter.

In the case of Digi, the Romanian operator has lowered prices in most combinations of its mobile telephone products (in the rest it has maintained them), while in those that offer mobile telephony and fibre it has maintained them. However, in both types of products they have increased the number of gigabytes they offer, and the changes have been applied since December.

Heard enough yet? Okay, there’s more. Although the postal “service” is somewhat lacking in many areas, the price of stamps will rise by 5.1%. Correos increases the price of the stamps necessary for sending standardised letters and postcards weighing up to twenty grams to national destinations by 5.1% by 2024, up to 0.82 euro, which represents an increase of four cents.

For their part, the same international letters and postcards will be franked at 1.70 euro (increasing by 5 cents) when the destination is Europe, including Greenland (excluding Albania, Armenia, Bosnia, Cyprus, Georgia, Malta, Moldova and Russia). The price has remained unchanged compared to last year when the destination is Australia, Canada, the United States, Japan, New Zealand and Russia, with 2.1 euro; and 1.75 euro for the rest of the countries.

As for the rest of its services beyond the public, the national parcel service will increase its prices by 1.99%, in this case below inflation, and after not making any increase last year, while the burofax will maintain their prices unchanged.

After a year of intense increases due to the European Central Bank’s rate policy, the 12-month Euribor has given a respite in the final stretch of the year and closes December at 3.679%, registering its largest monthly fall since February 2009.

The Euribor forecast for 2024 places the indicator at the end of next year in a range that goes from 3% to 4.2%. Funcas and Bankinter are the ones that foresee the highest figures for the end of 2024 (4.2% and 3.25%, respectively), while Caixabank places the Euribor at 3.06% and Asufin, at 3%.

There is some good news for those who use it, in that all transport will be fully or partially subsidised, following the aid approved by the Government to make certain modes of transport free of charge or to partially finance discounts on regional and local transport.

Specifically, the free Cercanías and Media Distancia trains for regular users have been extended again for the entire year 2024, as well as the 50% discounts on regional transportation.

This means that the autonomous communities will be obliged to contribute 20% of the 50% discount so that the State can transfer the funds to subsidize the 30% discount, all of which is intended for multi-trip tickets and tickets.

Along with the free Medium Distance and Cercanías trains, there will also continue to be free tickets for bus travellers whose responsibility falls on the State, as well as for regular travellers.

If you choose to drive however, more bad news follows, as from January 1, tolls on state-owned highways under administrative concession will rise between 5% and 6.65%, depending on the specific conditions of each concession.

Specifically, the 2024 rate review has meant an increase of 6.65% for the AP-46 and AP-7 Alicante-Cartagena; 6.55% for AP-9; 5.12% for AP-68; 5.07% for the AP-6, AP-51, AP-61, AP-53, AP-71 and AP-7 Málaga-Guadiaro, and 5% for the AP-66.

Remember though, you are saving on a reduced tax on basic foods. Or at least you would be if the supermarkets and suppliers hadn’t put the prices up so much that the discount no longer applies anyway.

Happy New Year!

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