This climbing gas prices It got worse with the Russian invasion of Ukraine from the end of February of this year, which started in May 2021. Vladimir Putin turned the tap of this raw material. another weapon of war and prices peaked in August. All forecasts suggest gas will remain high, but some firewalls are trying to contain these peaks and lessen the impact on consumers’ pockets.
Before 2021, the price of gas in Europe was below EUR 30 per megawatt-hour (MWh). But since the price hike started in May of that year, it’s peaking at 116 euros per MWh in October, but the worst will be around 350 euros per MWh in August 2022. These prices correspond to the Dutch market known as TTF (short for Title Transfer Facility). This platform trades natural gas in such a large volume that it has become the reference market for gas prices in Europe. Twenty-seven countries of the European Union set up a policy to prevent prices from reoccurring like that summer. Mechanism to copy international prices (lower) if European gas exceeds 180 euros per MWh It will come into effect as of February 15, 2023.
Some wholesale contracts are indexed to the Dutch market, meaning that traders and large consumers buy this raw material at this price. However, in addition to the European reference, there is an Iberian gas market (Mibgas) in Spain that was formerly TTF compliant. However, the lower dependence of Russian supply by the Iberian Peninsula and hence, Low supply risk in this region has led Mibgas to become ‘independent’ from the Dutch market. At the worst time of 2022 (July and August) it fell with a price difference of 57.58 euros lower for the Spanish market (TTF was 203.09 euros, Mibgas fell 145.51 euros in these two months).
If the price of the raw material is Between 40% and 50% of the gas bill of domestic consumersDepends on whether or not heating is included. It represents 67% for SMEs and 80% for industry. Added to the cost of raw materials VAT (by next 31 December, reduced to 5%) and regulated costs related to the point of supply, which include, inter alia, payment for transport and distribution networks and storage.
According to the National Markets and Competition Commission (CNMC), the Government, and consumer organizations such as OCU and Facua, the most appropriate rate for domestic consumers and SMEs is the Last Resort Rate, known as the TUR, which regulates the government. The executive intervened in this rate in September of last year to limit the increase in raw material prices, which are updated every three months (January 1, April 1, July 1 and October 1). If it rises or falls by more than 2%, up to a maximum of 15%. According to sources from the Ministry of Ecological Transition, this is 117 euros per year (under 5,000 kilowatt hours (KWh) per year) for households with lower consumption and medium consumption – 5,000 and 15,000 KWh per year– and high consumption between 15,000 and 50,000 KWh 885 Euros for families.
According to the figures announced by the Ministry of Ecological Transformation, from January 1 to March 31, this rate will increase by 8.67 percent on average compared to the current level. so for For a customer with low consumption, the increase will be 7.54%, 8.94% for those with average consumption and 9.21% for those with high consumption.. In the case of neighboring communities that have been eligible for these cheap rates since October, there is a reduction of about 2% compared to what they have paid so far. In both cases, the price is much lower than would be paid in the free market, where firms have been making upward revisions for months due to raw material instability.
The high rate of gas storage in the Old Continent, the low temperatures in the early stages of winter (in addition to cutting off shipments from Nord Stream, the main gas pipeline between Russia and Europe) managed to lower the prices of this crude oil. until the last months of 2022 Tense lull with ‘controlled’ gas prices between 75 and 150 euros per megawatt-hour. But the worst may be yet to come, according to the International Energy Agency (IEA), which has warned of a 2023 that could be “very difficult” for the European Union’s natural gas supply and thus prices. The increase in Russian exports means that this flow can no longer be relied upon for next year, adding to that a 2022 with “unusually mild” temperatures that could be very different next year.
The butane cylinder will start the year at 18.58 euros. Its price will be reviewed again on the third Tuesday of January 2023, but the Government has limited any increase to a maximum of 19.55 euros until 30 June.