Germany’s gas storage facilities are currently only about 50 percent full, which is worrying given the upcoming winter months. Gas prices are already rising, and uncertainty about the coming months is growing. Normally, gas traders fill storage in summer by buying gas cheaply and selling it at higher prices in winter. But this mechanism is not working at the moment.
The federal government, which could intervene, faces a choice between bad and worse. Either gas becomes very expensive again, or the country enters winter with the tightest reserve since gas storage began. Hoping for a mild winter is not a strategy.
Rising wholesale prices will not be felt immediately by private households, as the impact depends on individual contracts. Customers with variable tariffs will be affected sooner, while suppliers with long-term contracts can keep their rates stable.
Industry, however, could be affected more quickly and painfully. If Europe has to compete with Asia for liquefied natural gas in a cold winter, prices could rise sharply. High prices would force companies to reduce their gas consumption, which could relieve the market but would have negative effects on production and the economy.
This was already evident in 2022, when wholesale prices temporarily rose to many times today’s level.
The challenges for Germany’s gas supply are therefore considerable, and the coming months will be decisive.
Source: www.sueddeutsche.de
