Gas price differences across the EU fell last year, but remained high

After the crisis year of 2022, when differences in natural gas prices between Europe’s trading hubs reached unprecedented levels, prices began converging again last year towards the most liquid hub, TTF in the Netherlands. The convergence of prices on the Czech market with those in the Netherlands slowed after Germany introduced a gas transit fee.

Natural gas prices in most European countries returned to levels seen before the energy crisis triggered by Russia’s invasion of Ukraine, thanks to lower demand, high gas storage levels and increased imports of liquefied natural gas into Europe.

Alongside natural gas prices in European Union countries, the differences between prices on individual markets are also gradually narrowing. The European Union Agency for the Cooperation of Energy Regulators (ACER) published an analysis in its recent report on the EU natural gas market, which found that in 2022, the price difference between the most liquid trading hub, TTF, and other markets was frequently more than EUR 10/MWh.

In 2023, however, the situation calmed and natural gas prices across the EU began converging again towards prices in the Netherlands. As usual, prices came closest at the German trading hub THE, where gas was more expensive by less than EUR 1/MWh for most of the year.

Currently, the price of gas for delivery the following day (the so-called spot price) at the TTF hub is around EUR 30 to 35/MWh, while prices at other trading hubs across Europe generally differ by no more than EUR 3/MWh. For example, the price at the Czech CZ-VTP hub was EUR 33.525/MWh on Monday, while the price at the Dutch TTF hub was EUR 31.75/MWh.

The convergence of prices in Czechia and the Netherlands is held back by a gas transport fee charged by Germany to cover costs incurred when filling gas storage facilities in 2022. It was introduced last October and has more than tripled since then.

Several European Union countries, including Czechia, have criticised the fee. According to the Reuters news agency, the European Commission is likely to heed critics’ calls and take action against the fee.