The trading price for gas fell sharply on Monday and Tuesday. Traders paid around 164 euros for a megawatt hour on Tuesday morning. That is considerably less than the 188 euros on Friday evening and even half less than the record price of almost 350 euros at the end of August. The continued decline could mean good news for household energy bills.By Tom Van Gurp
The fact that the gas price is falling is partly due to the fact that European countries have been able to fill their gas stocks well in recent times. For example, storage facilities in the Netherlands are on average more than 90 percent full.
Another factor is that relatively warm weather is forecast in the coming weeks, that Norway can supply more gas to Europe and that the EU has determined that member states must start saving energy.
This was offset by the likely sabotage of the Nord Stream pipelines last week, but that only caused a short-term rise in trading prices.
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Gas still expensive despite decline
Incidentally, 164 euros for a megawatt hour of gas is still high if you compare it with levels from more than a year ago. Until October last year, a megawatt hour cost less than 40 euros.
Because the gas price rose last autumn and has remained high since then, many households have sky-high energy bills. For example, large suppliers such as Eneco, Essent and Vattenfall have announced that they will soon raise their prices considerably.
With trading prices falling recently, energy suppliers may lower their rates for variable contracts again in the future. However, this depends on the supplier’s purchasing policy and how the gas price will develop in the coming period. It also depends on what kind of energy contract you have.
From the beginning of next year, the cabinet will introduce a price ceiling for energy. A maximum price is set for gas and electricity, up to a certain annual consumption. The measure should ease the pain in households.
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