Energy hunger will lead to total gridlock

domenico de rosa

Energy hunger will lead to total gridlock

An energy crisis, the one the world has been experiencing for the past few years, which can also put the productive realities of industrialised countries in crisis. In Italy, which has to rely on other countries for energy resources, all production sectors are affected, from manufacturing to chemistry, passing through the paper industry, cement production, glass, and other products for which Italy excels in the world. Many companies, given the high energy costs, are forced to stop production at times when energy is more expensive. The negative impact on economic growth is inevitable, because if the price increases were completely passed on to customers, the result would be yet another slowdown in consumption. And the cycle would start again, even eroding the benefits of the PNRR

«This sharp rise in energy costs is largely due to speculation arising from the start of the necessary energy transition – explains Domenico De Rosa, CEO of the SMET Group, who adds – Over the past year, fuel price speculation has mainly concerned liquid methane gas, the protagonist of the first phase of the energy transition from traditional fuel to sustainable alternatives. The rise in fuel prices poses a serious risk to the ‘green’ transition projects of many companies, which have already made substantial investments, and which today are forced to face a disproportionate increase in prices that in many cases exceeds 100% in one year, risking to jeopardise the entire energy transition pathway».

It is worth emphasising, however, that the current energy crisis, with all the disproportionate increase in energy costs, is precisely due to the transition process, as De Rosa explains: «This process, which is currently still in the gestation phase, is caused by speculation due to the start of this necessary energy transition. The result is that inflation is being generated which, if not adequately countered with appropriate measures, risks being the concrete and triggering cause of a contraction in consumption in the not so distant future. Stagflation, i.e. the combination of stagnation and inflation, is therefore just around the corner, and will be accompanied by a reduction in growth in our country, with a sharp increase in product prices».

Tomorrow, Wednesday 19 January, meanwhile, a round table with companies is scheduled, called by Minister Giancarlo Giorgetti of the Ministry of Economic Development: «Individual countries should watch over and guide these epochal transitions and commit themselves to averting phenomena such as those we have only begun to witness in recent months – suggests De Rosa – From the meeting with Minister Giorgetti we expect a lot. If these measures are not taken within a short period of time, we will have to reckon with a long period of stagflation with low growth or recession combined with high inflation».