Berlin expects energy prices to surge ahead of the heating season, according to a new report
Gas prices in the EU’s largest economy, Germany, are likely to soar and remain high until at least 2027, Bloomberg reported on Wednesday, citing the latest report by the Economy Ministry.
According to the report, based on the forward prices at the end of June, wholesale gas prices may surge to around €50 ($54.62) per megawatt-hour ahead of the heating season. They are expected to remain high for the next four years, unless additional emergency measures are taken, the report says.
The ministry pledged to continue to monitor developments in the gas markets in order to be prepared to deal with potential problems that may arise with the higher prices.
The ministry’s projections are in line with a recent forecast by German gas storage operators group INES. Earlier this month, the group warned that Germany will remain in danger of gas shortages during the heating seasons through the winter of 2026-27, unless it adds more fuel infrastructure, including additional liquefied natural gas (LNG) terminals, storage capacity, and pipeline connections.
Germany relied on Russia for roughly 40% of its gas prior to 2022, and was among the hardest hit by the reduction in Russian energy deliveries last year, which were either significantly curtailed or entirely halted after the EU imposed sanctions on Moscow in response to the conflict in Ukraine.
Despite measures taken by Berlin to replace Russian gas with alternate supplies and efforts made to lower energy consumption, experts have warned of the lingering threat of shortages ahead of the heating season, and a surge in prices.
The government has already paid €22.7 billion in power and gas subsidies since last year to ease the effects of elevated costs on customers, including a one-off payment in December, the ministry said on Wednesday.
EU benchmark gas futures for September delivery at the TTF hub in the Netherlands were trading at around €38.6 per megawatt-hour in household terms at around 08:00 GMT on Thursday, after surging to nearly €47.6 earlier this week. The price is roughly twice as high currently as its average between 2008 and 2021 (around €19.40)ز