Experts: Czech gas price increases will be partly passed on, but a full-scale price rise is not currently looming

Gas price increases on the energy market in recent weeks will first be reflected in suppliers’ short-term price lists, and offers aimed at attracting new customers may also be scaled back. This is according to information analysts provided to the Czech News Agency (ČTK). However, they say immediate price increases across suppliers’ entire range of offers are not yet looming, partly because of current developments on the exchange. The market situation in spring will be decisive.

Gas prices rose for most of last year, reaching their highest level in two years last week. „The increase was driven by a rapid drop in European storage levels, combined with high demand and limited supply on the market,“ said Jiří Tyleček, an analyst at XTB.

According to him, prices for end consumers are currently close to their lowest levels since 2022. But Tyleček said higher prices on the exchange will soon have to feed through to consumers, especially if they remain elevated through the spring months. He noted that the market is currently highly uncertain. „On the one hand, Europe’s storage facilities are at their lowest levels since 2021 and will need massive volumes of gas to refill them. On the other, talks are beginning on ending Russia’s aggression against Ukraine, which could bring Russian energy, including gas, back to Europe. An end to the war could also provide an economic growth stimulus, driving up demand for gas,“ Tyleček said.

Comparison websites therefore expect short-term tariffs to be affected first. „Monthly price lists will go up, and immediately. Customers on spot-price tariffs have already seen prices rise. Their prices change in line with the exchange,“ said Lukáš Kaňok, head of the Energo division at Kalkulátor.cz.

Tomáš Vrňák of Ušetřeno.cz said that offers aimed at attracting new customers could also be affected by rising exchange prices. According to Vrňák, these offers are currently priced below the level at which energy is traded on the exchange. „This situation is obviously unsustainable, and suppliers will have to adjust their acquisition and retention price lists upwards,“ Vrňák noted. This is borne out by the actions of some Czech suppliers, which have already withdrawn some of their offers aimed at attracting new customers in recent weeks.

Analysts say there is currently no reason for immediate price increases across the market’s entire range of offers. They point to the price decline in recent days. „Prices have fallen sharply since Wednesday, by around 15 percent,“ said Radim Dohnal, an analyst at Capitalinked.com. He attributes the decline mainly to expectations that gas supplies from Russia to Europe could resume, as well as a drop in emissions allowance prices.

He said it would therefore be sensible to wait a little before locking in energy prices, especially in light of US-Russian talks in Saudi Arabia. „For household gas, I would ask the supplier for a price of no more than 1100 Kč per megawatt-hour (MWh), and for electricity, 2700 Kč per MWh,“ Dohnal said.