Rising electricity prices drive an increase in inflation in June

Sector was the main inflationary factor of the month due to the activation of the red tariff flag, at level 2
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Driven again by the rise in electricity, official inflation in the country, measured by the IPCA (Broad National Consumer Price Index), rose 0.53% in June this year – the highest result for the month since 2018, when it was 1.26%, according to data from IBGE (Brazilian Institute of Geography and Statistics). O indicator now accumulates an increase of 3.77% since the beginning of the year and 8.35% in the last 12 months.

The price of Electricity was the main factor for the increase in the month due to the activation of the red tariff flag, at level 2, which came into force in June at a cost of R$ 6.243 for every 100 kW/h consumed.

In May, the country operated under red flag 1, whose increase was lower, at R$ 4.169. However, with the worsening of the water crisis, caused by the lack of water in the main Brazilian reservoirs, the value needed to be readjusted once again during the year.

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For the month of July, ANEEL (National Electric Energy Agency) announced a new adjustment in the value of red flag 2. extra fare value increased by 52% and changed to R$ 9.492 for every 100 kWh consumed. 

Assessment 

In the opinion of Arthur Santini, director of Ecori Energia Solar, Brazil needs to start worrying about diversifying its energy matrix, investing in renewables, especially photovoltaics. “Solar helps us to have lower costs as a whole, relieving the national electricity system, avoiding tariff flags, eliminating the need to build new thermoelectric plants and also helping the environment,” he said.  

For the executive, the High energy prices affect not only Brazilian families, but also businesspeople who depend on electricity to provide their services. “It is more than necessary to approve a Legal Framework for renewables in distributed generation, which allows the country to grow with clean energy”, concluded Santini. 

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Henrique Hein
He worked at Correio Popular and Rádio Trianon. He has experience in podcast production, radio programs, interviews and reporting. Has been following the solar sector since 2020.

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