Similar to the ways in which the European Union has been targeting Russia with economic sanctions since the beginning of the invasion of Ukraine, Moscow has used gas and petroleum embargoes to pressure the West into an energy crisis.
The EU was thus forced to find alternative suppliers, which it managed to do. This resulted in a filling of gas stocks and a drastic price decrease of up to 300% at major buyers. This however begs the question of why consumers still have to pay elevated gas bills.
The price of gas does not evaluate according to daily rates since it is bought and stocked long before being used. This means that the new drop in prices is only expected to start reflecting on consumer bills by March next year.
Our colleagues from RTL discussed the issue with Claude Simon, director of purchases at Enovos, who noted: “Looking at the major markets, one can see that gas prices are still on an extremely high level. You may have lower gas prices at the moment due to elevated temperatures, but they are still higher than what used to be the case.”
Simon continued: “We buy gas over time in a structured manner and if you look at the current market, then you can see that we still have very, very elevated prices, presumably even well into the future, much more than what prices used to be.”
During the energy tripartite meeting, the government settled on capping gas prices until the end of 2023.
Simon provided insight into the proposed solution: “The tripartite agreement says that residential clients will not have to pay more in January 2023 than in 2022. The details are currently being retained. Clients will of course benefit from this measure, ... in summer we were at 35% of the global bill in terms of user costs, taxes, and so on.”
The Enovos spokesperson admitted that there is no way of predicting the further evolution of the situation.
Asked about electricity prices, Simon explained: “We used to have electricity prices of €40, €50, €60 and now we have a price of up to €350, €400, €500. So, those market prices are also extremely elevated. The government’s tripartite agreement will help better the situation and support clients.”
It thus remains clear that, at least for the foreseeable future, energy prices will largely depend on the further evolution of the geopolitical situation in Europe.
