Consumers are paying more than ever for gas

Despite short-term drops in gas prices on the exchange, consumers are paying more for fuel than ever before. Even though Nord Stream 1 is no longer providing gas, wholesale gas exchange prices are declining. There are several causes for this. However, the situation remains tense in the winter.

The energy crisis has arrived. Putin recently shut down the primary gas pipeline Nord Stream 1. The Kremlin officially cited necessary maintenance as the reason. However, the country cannot carry out this action due to current EU sanctions.

With even less gas entering the EU and winter approaching, it is all the more remarkable that gas prices on the TTF market have dropped by 40% in less than two weeks.

The distribution halt from Nord Stream 1 is one of the reasons for dropping gas prices on the stock exchange. Despite what appears to be a paradox, President Clemens Fuest noted that the threat of a delivery halt had become a reality. This now provides for a more realistic approach to the issue of supply security. Before then, the market had descended into a spiral of speculation and uncertainty, driving petrol prices to previously unheard-of heights.

Another factor can be traced back to the federal government's efforts to fill as many gas storage facilities as feasible. According to the Handelsblatt, this has been the case in Germany and the EU thus far. By October 1st, the goal was to have filled 85 percent of Germany's gas capacity. This was accomplished many weeks ago, meaning the country's current storage level is around 88.5 percent. The almost filled storage tanks provide safety, which has a calming influence on gas prices.

Furthermore, a scarcity of supply from Russia necessitates new supply techniques. These include, for example, the utilization of existing nuclear power plants as an emergency reserve, the deployment of transportable power plant ships, and partnerships for mutual supply. But, industrial austerity will likely impact gas prices more than any other option. According to the Federal Network Agency's Gas Supply Management Report, the industry consumed 20% less natural gas than in prior years in July and August. All of these variables help to alleviate the previously volatile rise in gas prices on the stock exchange.

Even though lowering prices recently has offered reason to rejoice, experts warn against jumping to conclusions. At the national level, energy supply remains a unique issue.

The current downturn should be considered a reaction to previously unfathomably significant rises. However, prices are projected to grow further in the medium term. Even after a 40% drop, prices are more significant than ever compared to past years.

As soon as the outside temperature drops to a level that necessitates heating in the coming weeks, demand for natural gas will rise, and so will the price.

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