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European Commission: global gas markets affected EU’s wholesale and retail gas prices in Q3 2021

Wholesale gas prices rose to record levels in the third quarter of 2021 in the European Union. According to the European Commission’s latest quarterly gas market report, the trend was mainly influenced by global gas markets but the EU’s low gas storage levels played a role too.

In the final months of the third quarter, the prices of spot contracts rose from 37 euros/megawatt-hours (MWh) to higher than 100 euros/MWh, reaching the highest threshold ever seen before in the EU. As a result, the wholesale market prices became very volatile and high energy prices filtered in the retail market, calling for policy measures in several countries in the European Union.

The influence of the global gas market on European wholesale gas prices kept on determining the LNG availability as well, ultimately limiting its imports in the EU.

In the third quarter of 2021, the volume of Russian gas imports rose by 2 per cent compared with the same quarter of 2020 and Nord Stream remained the main supply route of Russian gas to Europe. Reportedly, its share reached 40 per cent of the total Russian pipeline gas imports.

The Ukraine transit route resurged to second place, ensuring 27 per cent of the total Russian pipeline gas transit, up from 25 per cent a year earlier. The share of Turk Stream also reached the highest since the start of its operation in early 2020. It reached 9 per cent in the third quarter of 2021 which was a 4 per cent rise from the same period in 2020 and a 2 per cent rise from the second quarter of 2021.

On the retail gas prices, significant differences could be observed across Europe already in the third quarter of 2021. The CEE regions, Latvia, Hungary, Romania and Lithuania maintained the lowest household prices with 3.1 Eurocents/kilowatt-hours (kWh), 3.2 Eurocents/kWh, 3.3 Eurocents/kWh and 3.6 Eurocents/kWh respectively.

Retail gas prices for industrial customers rose measurably by 24.4 per cent in the third quarter of 2021 with the exception of Slovakia where industrial gas prices decreased in year-on-year comparison in the same period.

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