The price of gas plummeted to its lowest level since June. Costs are back to pre-war levels in Ukraine: quotations fell by 30% in a few days, precisely in coincidence with the approval of the gas limit in Europe.
The cost of a megawatt-hour has dropped below the psychological threshold of €100 and the price cap could prompt companies to review contracts. Families and businesses, however, will not immediately benefit from the reduction. While it helps to mitigate trades, the dynamic price cap will not be enough to reduce bills. In fact, the gas price ceiling will come into effect when the Amsterdam FTT monthly quotations exceed the threshold of 180 euros per megawatt hour for three days, with a difference of at least 35 euros compared to the average price of liquefied natural gas in a “basket” of international markets. Therefore, consumers (businesses and households) are unlikely to see the impact of the cap on their bills immediately. Also because, after a relatively mild autumn, winter is already starting with colder temperatures and, therefore, there will be an increase in the demand for gas.
Source: IL Tempo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
