Following the cessation of gas supplies to OMV from Russia, Austrian consumers should not expect any noticeable price increases in the coming heating season. “Such a situation was already expected on the markets. “In addition, suppliers have largely hedged their prices for this winter,” says E-Control economist Johannes Mayer.
The consequences of the delivery stop will also probably remain minimal for customers with variable contracts. “Once you have signed such a contract, you feel it a bit. But the impact will only end.” Consumers with so-called float rates are currently faced with a maximum increase of one to two euros per month, Mayer estimates.
Gas prices rose briefly
In the wholesale sector, the gas price rose to just under 47 euros per megawatt hour (MWh) on Friday, but during the day the price calmed down again to the level before the announcement of the supply stop to OMV, which has been in effect since 6 a.m. today.
In any case, the suspension of deliveries has only a minor impact on prices on the European market. “OMV is only a contract partner of Gazprom. “In addition, the transit contract via Ukraine runs until the end of the year,” the expert said.
Longer term prediction is difficult
In the longer term, i.e. after the winter of 2024/2025, the development of the price level is currently difficult to estimate. “We can already see that the markets are nervous,” Mayer said. However, from the current perspective, the market assumes that prices will remain stable in the fourth quarter of next year. “This is good news for households.”
The supply stop will probably only affect OMV. Russian gas continues to flow to Europe via Ukraine, which is also traded in Austria, regulator E-Control said in a press release. We don’t know who owns this gas, “but gas is coming in,” Mayer explains.
OMV uses alternative sources of supply
It initially remained unclear whether OMV would be able to purchase Russian gas in the future from alternative sources, such as from Slovakia or from other market participants. “We have made great efforts over the past three years to diversify our supply sources and transportation capabilities with non-Russian gas. If Gazprom’s supply is interrupted, we will primarily rely on our alternative sources of supply and supply our customers reliably and without interruptions,” the report said.
The reason for the gas supply stop to OMV is the ruling of an arbitration court, which awarded OMV damages of 230 million euros. OMV subsequently announced that it would stop payments to Gazprom to recover the million dollar reward. Chancellor Karl Nehammer (ÖVP) emphasized on Friday evening that the supply stoppage for Austria was manageable, as gas storage facilities were full. OMV itself and E-Control also tried to reassure people in this area.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
