Czech gas suppliers do not yet plan price rises, with supplies secured in advance

Gas suppliers do not yet plan to raise prices because of the increase in commodity prices. If the market situation caused by the conflict in the Middle East persists, it could affect primarily new customers and those without fixed prices. Companies also say they have secured gas supplies in advance. Gas companies told ČTK today in response to an enquiry.

The price of gas for the European market rose by as much as 35 percent at the start of today's trading, climbing above 70 euros (around 1700 Kč) per megawatt-hour. It responded to reports of attacks on energy infrastructure in the Middle East. However, its gains later eased. According to AFP, the price increase was driven by an Iranian attack on a liquefied natural gas plant in Qatar.

"The increase has so far been significant mainly on short-term markets, but the tense situation in the Middle East has not yet had a more pronounced effect on purchases for longer periods," said Jan Zápotočný, vice-chairman of the board of E.

ON Energie. A continuation and escalation of the conflict could be reflected primarily in tariffs for new customers.

According to spokesman Pavel Grochál, Innogy has secured gas supplies three years in advance. "However, the current situation will be reflected in tariffs for new customers and customers without fixed prices. How will depend on further developments in the Middle East and on how international events affect the European wholesale gas market in the coming days and weeks," he said.

"Given the current adverse situation, we do not now plan to increase natural gas prices for our customers. However, if the adverse situation were to last a long time, it would logically gradually be reflected across the entire market and prices would have to move," said Miroslav Vránek, spokesman for Pražská plynárenská.

The company secures the majority of its natural gas supplies in advance.

Companies say most of their clients have fixed prices. At Innogy, people most often fix prices for three years, while E.ON customers are currently fixing two-year products. Since the start of the war in the Middle East, ČEZ has recorded a third more customers interested in fixing prices, according to spokesman Ondřej Svoboda. ČEZ sources gas mainly from fields in Texas and Louisiana and does not transport any gas through the Strait of Hormuz. It purchases both gas and electricity well in advance.

The largest Czech gas storage operator, Gas Storage CZ, says its capacity is 26 percent full. The company operates six underground storage facilities with a working volume of more than 2.7 billion cubic metres. According to the company, this represents approximately two months of gas consumption in the Czech Republic during the winter months.

The conflict in the Middle East, which began with US-Israeli attacks on Iran at the end of February, has among other things disrupted shipping through the Strait of Hormuz. Around a fifth of global oil and natural gas supplies normally pass through it.