The wholesale price of natural gas in Europe has been falling for several weeks and currently stand at 32 euro per megawatt/hour, its lowest lowest level since December 2021. A relatively mild winter and plentiful supplies of liquefied natural gas (LNG) have served to push down the price of natural gas on the wholesale market. The fall in the price that energy suppliers pay for their gas is now in turn also being reflected in the price they charge their customers.
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Wholesale gas price at lowest level in 1.5 years and this is reflected in consumers’ bills
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For past few days the price of natural gas on the European wholesale gas market has been fluctuating at around 32 euro per megawatt/hour. The last time prices were at that level was back in December 2021. Moreover, the current wholesale gas price is around one tenth of what it was when gas prices peaked in August 2022. Since last August prices have been falling and since the start of this year the fall in gas prices has been more or less constant.
The fall in gas prices is due to several factors. First of all the mild winter served to curb demand. The strong reaction by European nations to the war in Ukraine has also played a role as has a big increase in supplies of LNG. This has meant that there are enough supplies to cope with demand and as a result the price of gas has returned to levels last seen in late 2021.
Will the downward trend continue?
No one dares predict whether the fall in gas prices will continue. Nevertheless, that doesn’t mean that the fall in wholesale prices won’t be reflected in our energy bills. Most domestic energy consumers are on variable contracts where the price they pay is modified every month or every quarter.
Since the start of the year the average energy bill in Flanders has fallen by around 40%. Energy suppliers advise there customers to check the amount they are paying every month as an advance on their monthly bill at regular intervals to make sure that they are not paying too much. The energy company Luminus told VRT News that "We encourage our existing customers to modify the amount they pay as a monthly advance based on the latest price details and the amount their consumption. Most customers are now being advised to reduce the amount they pay as an advance”.