The Russian state-owned company Gazprom warns its European customers against sharply rising gas prices in the winter. Those could rise by 60 percent to more than $4,000 (3,923 euros) per 1,000 cubic meters, the company announced in Moscow on Tuesday. The reason for this is that exports and production continued to contract as a result of Western sanctions over the war in Ukraine.
“European spot gas prices have reached $2,500 (per 1,000 cubic meters),” Gazprom said. “According to conservative estimates, if this trend continues, prices will exceed $4,000 per 1,000 cubic feet this winter.” Ukraine has closed one of Gazprom’s routes for deliveries to Europe. The group itself has reduced the capacity of the Nord Stream 1 Baltic Sea pipeline to Germany to about 20 percent in a dispute over a gas turbine from the German company Siemens Energy, which is responsible for its maintenance.
Exports are collapsing more and more
Overall, Gazprom’s gas exports fell 36.2 percent to 78.5 billion cubic meters between January 1 and August 15. At the same time, production fell 13.2 percent to 274.8 billion cubic meters, the company said. Production has fallen 32.2 percent so far in August alone, from 35.8 percent in July, said CentroCreditBank economist Yevgeny Suvorov. The decline in exports accelerated to 59 percent.
The Dutch wholesale price for gas reached a record high in the spring of almost 335 euros per megawatt hour (MWh). Since then, they’ve fallen to about $250, data showed on Tuesday. However, they are still much higher than a year ago, when they were around €46 per MWh. In Germany and many other European countries, high energy prices cause inflation. According to experts, inflation could even reach double-digit values in the autumn.
Gas price brake still a problem
Austria is therefore discussing a gas price cap in addition to the planned electricity price brake. Vice Chancellor Werner Kogler said in the ORF “Summer Talk” that gas heating is comparable to electricity. You have to “expand and think further in that direction,” Kogler explained, but at the same time limit it: “Now let’s finish one thing.” This meant the electricity price brake, which will be presented in the autumn.
The head of the economic department of the regulator E-Control, Johannes Mayer, did not react unkindly on Tuesday. In the Ö1 “Mittagsjournal”, the expert described it as “feasible” to subsidize a certain amount of gas. This would boost purchasing power, he said, and be more of an anti-inflation than a social measure.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
