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Notice regarding the consideration of gas and electric energy price changes in calculating the consumer price index, 09/08/2022

The price changes in gas and electric energy, provided within the universal services framework for households, published in Government Decree 259/2022. (VII. 21.) as well as the related HEA (Hungarian Energy and Public Utility Regulatory Authority) decrees 6/2022 and 7/2022, published the same day, affect the consumer price index calculation of the Hungarian Central Statistical Office (HCSO), too. The price change is incorporated into the inflation statistics published on a monthly basis as follows.

The price changes of gas and electric energy consumed by households are taken into account by the HCSO, when calculating the consumer price index, in the proportion of the households concerned. By this token the HCSO is measuring how much the total household sector is paying for the consumed gas and electric energy on the whole at the old (before 1 August) and at the new prices. Given the consumer price index calculation method, the ratio of total expenditures on old and new prices for the consumed quantity recorded for the base period gives the price index referring to the gas and electric energy appearing in the consumer price index.

Calculations are based on the gas and electric energy consumption related data of the Hungarian Energy and Public Utility Regulatory Authority (HEA) registered on the national economy level as well as the data measured by the HCSO among households on household consumption. HCSO calculates the amounts to be paid on household level, then, by aggregating these, obtains the national economy level data. As such HCSO considers, when performing the calculations, the distribution of gas and electric energy consumption among households; also, to the extent of available data sources, takes into account household structures (e.g. large families’ allowances, etc.), too. This way it is ensured that gas and energy consumption is represented in the adequate proportion in the unchanged- as well as in the higher price range group.

Based on official information, the discounted quantity stipulated in the Decree is available during the 1 August 2022 – 31 July 2023 period on a yearly basis, thus, according to the intent of the regulator, a household is expected to pay the same amount for a given gas and electric energy quantity consumed in a year, regardless if it is paying through on-account invoicing based on yearly reading, or through monthly, actual consumption readings based invoices for the two energy services. As the final expenditure is defined by the consumed quantity falling into the unchanged and the higher price range, the weighted average price on the household level, depending on the consumed quantity is equal in the case of both invoicing methods. This is the reason why the HCSO does not differentiate at the consumer price index calculation between the monthly and yearly reading related invoicing and is considering the proportion of the above-the-discount amount on a yearly basis.

The HCSO would like to emphasize that due to methodological differences there may be discrepancies between the domestic consumer price index and the harmonised consumer price index (HICP), the latter is also calculated by the HCSO, however it is primarily published by Eurostat. Namely, in the case of HICP the price change for each service must be accounted in the month when the given service is actually used; whereas in the case of the domestic consumer price index the invoice, namely the payment due date counts, which is, characteristically for energy services, the month following the consumption. In consequence the gas and electric energy price increase shows up at different times in the case of the two indices: the price change is in the August data in the case of HICP, while the index calculated based on the domestic methodology will first show it at the September data.

The calculation of the impact of current energy price changes on the consumer price index is underway, its scale being published at the same time as the First releases containing the data of the given months.

 

Hungarian Central Statistical Office

H-1024 Budapest, Keleti Károly u. 5-7. Phone: +36 (1) 345 6000
Postal address: P.O.B. 51 Budapest, H-1525
http://www.ksh.hu