Gazprom has turned off the gas tap to Austria. Supplies for this winter are assured, but what happens next? The “Krone” knows where price increases are waiting now.
Last week, an arbitral tribunal awarded OMV 230 million euros due to irregular deliveries in the past. The debtor: Russia’s Gazprom. OMV wanted to suspend gas payments until the amount was paid. The Russians responded by cutting off gas supplies. Deliveries stopped on Saturday morning. The Chancellor, OMV and E-Control guarantee that supplies for this winter are safe.
But what happens next?
For the time being, prices are stable. The upcoming exit may already have been taken into account on the stock exchanges. One thing is certain: things can move quickly on the energy market, we also saw that in 2022. In the short term, many experts expect electricity costs to rise by as much as 20 percent. Customers with float rates will feel this acutely. Because they are directly linked to the market price.
And Peter Hanke (SPÖ), Vienna City Councilor for Economic Affairs, warns: “Some upcoming price increases are also the responsibility of the federal government. It must ensure that consumers are not affected by high energy prices.”
Network costs are rising
This means rising network rates and the expiration of the electricity price cap at the end of the year, further increasing the burden on end customers. First forecast: Due to the increase in network rates, electricity costs will increase by about 23 euros per month in 2025. Due to the abolition of the electricity price brake, another 5.60 euros per month will be added. Tariff increases for the gas network could be around 30 percent.
Gas from Germany is more expensive
The German gas storage tax (a kind of toll for the gas network) is also not off the table yet. The German government actually wanted to abolish this for Austria at the end of this year. A corresponding bill has already been introduced. The problem: the question is whether the German Bundestag will still decide on this after the failure of the government coalition consisting of the SPD, Greens and FPD.
If Austria purchases gas via Germany, it must continue to be paid for – and the quantities will of course not decrease. The result is that additional costs run into millions. And then there is another, not unimportant, question that remains unanswered: can sufficient gas actually be transported to Austria? The urgently needed gas connection with Germany – the so-called West Austrian Gas Pipeline (WAG) – has not yet been constructed.
Who has the Russian gas?
And also: it’s almost a bit paradoxical. Russia turns off the gas tap to Austria overnight, but officially everyone thinks this is not a problem. No one needs to freeze and the industry is not harmed. But Austria was on Putin’s drip until the end. Until recently, about 90 percent of domestic gas imports came from Russia.
Certainly: the gas stores are well filled. But even without replenishing these reserves, Russian gas consumption barely declined. At best, everyone took advantage of the opportunity to fill the storage tanks relatively ‘cheaply’. In the worst case scenario, some market participants have now switched to panic mode. It is therefore unlikely that all these factors will have an impact on the energy price.
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.
