The gas price fell below 40 euros per megawatt hour (MWh). This is the lowest price since August 2021.
Due to the mild winter, the gas stocks of European countries are still more than half full, which is much more than usual. As a result, less gas has to be purchased to refill the gas tank for the next winter.
Gas prices rose sharply last year due to the war in Ukraine and tensions over gas supplies from Russia to Europe. They are almost closed now. In August last year, one megawatt hour of gas cost just over 300 euros, more than seven times today.
More purchases possible
Energy economics professor Machiel Mulder says it’s possible for the price to drop further. “Before the war in Ukraine, the price fluctuated around 20 euros per MWh. Since we can hardly get any gas from Russia, we now have to process the gas in Europe. This costs around 10 Euros per MWh.” Therefore, the price is likely to drop to around 30 Euros per MWh.
On the Amsterdam gas exchange, a fee of about 40 cents per cubic meter of gas is charged. Mulder does not expect prices to rise sharply again anytime soon.
look back at wallet
Consumers will need to be patient before they notice the low prices on their wallets. “As utilities buy their gas upfront, consumer prices lag behind wholesale prices. But that will likely be reflected in the contracts offered in a few months,” says Mulder.
Source: NOS
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.
