Household gas prices in Germany show first signs of falling – BDEW report
Clean Energy Wire
Average German household gas prices could begin to fall soon, as individual gas suppliers are already able to lower their prices, according to utility association (BDEW). Following two years of extreme volatility and price increases on energy markets, wholesale gas prices have fallen substantially from last year's peaks. While average gas wholesale prices remain around four times higher than the long-term average before the start of the upward trend in 2021, there are signs of a longer-lasting ease in prices, according to a BDEW report. “Competition on the gas market is working and energy suppliers are passing on price reductions as soon as their procurement situation allows,” BDEW head Kerstin Andreae said. “However, gas suppliers still have to pass on last year's high wholesale prices despite everything,” she added. Many companies procure gas on a long-term basis, which means contracts signed last year remain at very high levels, Andreae explained. In contrast, companies with short-term procurement strategies could begin lowering their prices.
The average gas price for household customers in February 2023 was 18.15 cents per kilowatt hour (ct/kWh) in a single-family house and 17.72 ct/kWh in a multi-family house. The average prices for a kilowatt hour of gas in the fourth quarter of 2022 were 20.04 and 19.81 ct/kWh respectively. Prices have decreased due to the winter being unusually mild so far and weather conditions being favourable for renewable energy production, according to Marco Wünsch from energy consultancy Prognos. Germany responded to the energy crisis with a series of relief packages for households and businesses, which have continuously grown in size and scope. During its first year in office, the government presented a 200-billion euro ‘defence shield’ in September, which includes subsidies for reducing gas and electricity prices, a measure that parliament adopted in December.