You might have seen the recent news that, for the first time since Russia invaded Ukraine last February, gas prices had returned to pre-war levels. However, households across the Netherlands continue to face sky-high prices and large bills - how is this possible?

Gas prices fall to the lowest level in over a year

After peaking at 330 euros at the end of August, on Wednesday morning gas prices fell to around 68 euros per megawatt-hour - the lowest rate recorded in over a year. But why are prices falling now?

Firstly, the extremely mild weather being seen across Europe has led to a significant drop in demand. Furthermore, the gas reserves filled by the Netherlands are also well-stocked, meaning fear of supply shortages has diminished over the past few weeks. And finally, the Netherlands has increased the imports of liquid gas (LNG) in order to fill any gaps in supplies.

Even though this does mark a significant fall compared to just a few months ago, energy expert Lucia van Geuns told NOS that it’s worth remembering that gas prices are still five times higher than they were at the beginning of 2021.

Why are energy prices in the Netherlands still so high?

While this is hopefully good news for the future, you’ve likely noticed that the gas prices at your energy company haven’t fallen. There’s a pretty simple reason for this: the gas currently being supplied to you and your family was bought by your provider when prices were higher. 

The rate you pay for energy therefore depends on the price your provider paid when it bought the gas. It also means that it’s difficult to predict when (or if) you’ll benefit from the current low prices, as this depends on your energy company.

Some suppliers operate through last-minute purchases, meaning gas supplies are almost immediately sold on to customers. If your energy company works this way, then you should also benefit from the recent drop in prices.

Will gas prices rise again in the future?

Whether or not gas prices will once again reach the rates seen last summer is unclear. If the weather changes and the temperature drops, demand for gas will once again increase. While this shouldn’t have too much of an impact on supplies for this winter, the Netherlands will have to replenish its reserves in the spring, so there is some uncertainty about next autumn and winter. 

Thumb: Dmitriy Halacevich via Shutterstock.com.