Electricity bill increase in the century is four times greater than inflation

The rise in the cost of electricity has been one of the main drivers of inflation and the loss of purchasing power among Brazilians this century. This is what a study commissioned by Abrace Energia and released this Thursday (3) by Ex Ante Consultoria Econômica points out. 

The survey reveals that over the last 25 years, the IPCA (Broad National Consumer Price Index) has accumulated an increase of 326%. In the same period, the cost of electricity bills has jumped 1.299% — that is, almost four times more than the country's official inflation.

The result of this imbalance? An influence of up to 90% on the prices of essential products — since by increasing the energy tariff charged to companies, the impact directly affects the production costs of the industry, commerce and services sectors.

The cost of French bread, for example, has risen 509% this century, with 85% of this increase being caused exclusively by higher energy prices. A similar situation occurs with long-life milk and cheese, whose increases of 86% and 92%, respectively, are explained by the direct impact of the increase in the price of electricity. In the construction materials sector, cement has accumulated a 218% increase associated with energy costs.

The research also highlights that the increase in energy used in production also affects companies' production costs in other ways. “This is because companies also use energy directly and indirectly, creating chain reactions of energy cost shocks. For example, an increase in electricity rates increases a brewery’s electricity bill while also increasing the price of packaging used in manufacturing,” the study reports. 

Provisional Measure

The research released by Abrace Energia also analyzes the effects of the new provisional measure for the electricity sector — the MP 1.300 / 2025. The entity considers that the initiative brings important benefits, such as the proposal to improve contract management in the Free Energy Market. 

However, it warns of the risk of transferring the costs of subsidies for low-income consumers to the industry. Abrace understands that — although socially fair — exemptions or discounts on electricity bills for the poorest segment of the population, if paid for by the industry, can generate economic distortions. 

In understanding the Embrace Energy, although this type of consumer ends up paying less on their electricity bill, the cost may end up being passed on to the prices of basic products — in a kind of cascade effect that would end up canceling out the real gain.

In this sense, the entity advocates that social subsidies be financed via the public budget or federal taxes, such as PIS and Cofins, and not passed on directly to companies, to avoid new imbalances in inflation.

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