Exceptional Publications

October 6, 2022

The solution for saving gas and energy costs is simpler than you think!

In my opinion, it could be based on the simplest rule that we all know about the Economics, studied by all those who have attended just up to the high school.

This rule will be even more appropriate if we take into account the role that speculation and the negotiation mechanisms play on the respective markets.

Summing up, they anticipate and increase the expected effects both from a future increase and a decrease in demand for a product/service ever since the news of that future event starts to spread up.

In other words the application of the solution that I will be proposing could have positive ripple effects even greater than you think and that's vill be good regardless of some rules that explain the pricing of the energy by linking it to the cost of the gas on tha market.

What is it like?

Let's suppose that companies, whose products and services are not being placed on the market due to the lower purchasing power that consumers are undergoing in the wake of the increasing energy and gas costs and that is going to lower even more since the great economic recession is looming large, work one or two days less than usual.

This would lead to savings in gas and energy consumption without compromising anything because, as mentioned before the production at full capacity is not taking place.

In essence it would decrease a realistic excess production.

Nonetheless business managers should bee careful not to reduce production capacity, that is to say the assets available for the firms to match a future increase in the demand for their products that will restart in the medium term.

That said, returning to the reduction of working days and making it a rule for a great number of businesses of a country, for instance, the resulting lower demand for gas and energy would bring down the respective prices on the reference markets.

 Once more don't forget the market mechanisms, or whatever you want to name it, as mentioned before that would spread the price reduction effect. 

The most striking example of the latter consideration is the current trend of the price of oil which is downwards due to the fears of a global economic recession.

The OPEC, taking these predictions very realistically, in order to avoid to lose further profits, due not only to the decrease in the oil quantities required but also to the lowering of the price per barrel has just decided to cut the production that would determine an increase in that price.

Turning back to the solution proposed, after a short period the companies, because of the normalization of the costs of gas and energy that are going to be transferred in a lower amount to the prices applied on the market, would see an increased demand for the respective products from consumers that in their turn will benefit from the reduction in their gas and energy costs.

In the end, hoping also for parallel solutions, the price of gas and energy will stabilize at an acceptable level and the improved purchasing power will favor a positive rebound for the economy as a whole.

Well, as you can see it is a simple solution based on a simple reasoning at the base of which there are no big and complex technical processes but an idea that requires only some Country/Europe's regulations which causes the companies to change their work organization in order to create economic benefits for them and for the whole community.

As a countereffect, some firms could be tempted to lay off some of their workers as a result of the reduction of the working days to benefit even more from that situation in the short term.

The national/european lawmaker should regulate also that case...