The price of European natural gas has been falling since the beginning of the year. It costs the same as it did two years ago. The reasons at a glance.
Where is the gas price now? On the spot market, the price of European natural gas fell below EUR 24 per megawatt hour (MWh) on Tuesday. Gas was last this cheap in June 2021 – two years ago. The downward trend has been going on since the end of last year.
Why has the gas price fallen? According to Radio SRF business editor Dario Pelosi, there are various reasons. The winter was mild and therefore less gas was used. “That means the gas storage tanks are full.” This is also shown by the data on the filling levels of the German gas storage facilities, from where Switzerland also gets gas. “The memory is filled to over 74 percent,” says Pelosi.
What are other reasons? Another reason for the falling gas price is LNG (“liquefied natural gas”) – i.e. liquefied natural gas that can be transported from overseas by ship. “Europe has secured LNG with a lot of money and in some cases even took this gas away from poorer countries,” explains Pelosi.
In addition, Switzerland uses less gas. “In households, but above all in industry, since the economy is weakening and demand has fallen.”
How expensive was gas last year? Due to the consequences of the war in Ukraine, the raw material had become significantly more expensive in 2022. A record price of more than 300 euros per MWh was paid last summer. For example, a standard household in Germany with a gas consumption of 20,000 kilowatt hours had to pay 4,300 euros for it last autumn. Two years ago, consumers paid a good 1,300 euros for it. The price of European natural gas on the spot market is now below the level at the start of the war.
What does the lower gas price mean for Swiss households? That depends on which gas supplier you are connected to, says business editor Pelosi. “Everyone has their own strategy for how to get gas, i.e. with long-term contracts or short-term on the spot market.” Those who procured gas over the long term at the high prices last year are unlikely to lower the prices. Added to this is the timing of the price adjustment. Many suppliers would do this by the end of the year, only then would it be clear what the gas would cost in the future.