The price of gas is falling: what will happen in the coming months for the bills of households and businesses

The decline of the gas price continues, with some fluctuations, for days now. Prices have returned to much lower levels than those recorded in the summer, when it had even reached 300 euros per megawatt hour. Now the prices have almost halved and this gives hope for many families.

The drop in gas priceshowever, it will not result in an immediate reduction in bill. Gas tariffs could remain high for a long time, but in the meantime a small decline – albeit not particularly significant – could occur in the next monthsshould the current trend be confirmed.

The hope that families and businesses in Italy rely on is entrusted to Psv, or the virtual price registered on the Italian wholesale market. Many gas contracts are tied to this market and not to the Ttf of Amsterdam. But what will happen in the coming months with the drop in gas prices?

The price of gas

Gas, like oil, continues its decline in the last few hours. As for gas, in particular, the price in Amsterdam fell by 2% this morning, reaching a share 153 euros per megawatt hour: the decline was registered after the announcement of the EU plan which will be implemented in November.

The decline, however, lasted only for a few hours and in the early afternoon there was a reversal of the trend: after the intensification of the Russian attacks in Ukraine and on the capital Kiev, there are fears of a worsening of the conflict and greater problems also for the gas market. The price has risen to the level of the early morning, to 159 euros per megawatt hourhowever, far from the prices of the summer.

Gas price, what happens with the bills?

To understand what consequences the drop in the price of gas may have on bills a series of considerations must be made. Starting from a premise: the monthly price of methane is calculated on the basis of a arithmetic average of the quotations of each single day on the reference market, whether it is the Ttf in Amsterdam or the PSV.

To understand if there will be one prices drop we will therefore have to rely on a complicated mechanism and, above all, we will have to wait at least November as regards the protected market. For the free market, on the other hand, the price is usually fixed for one, two or three years and varies only according to consumption.

In reality, contracts are often used on the free market as well indexing on a monthly basis and in that case prices depend on market fluctuations. Also in this case a possible drop in the bills will not be seen before November, calculating the new price on the arithmetic mean of October. It is therefore possible that new data will be processed from November that will score one drop in bill prices.

What factors can bring down your bills

The price of gas has been falling in recent days for a number of factors, starting with reduction of consumption: between September and November the heating and air conditioners are off and therefore less gas is needed and consumption is reduced. Obviously this situation could change with the arrival of winter, especially in the case of a very cold season and the need to turn on the radiators often.

The fall in prices it is also due to the continuous reduction of imports from Russia: the flows on which the EU and Italy are based are increasingly less linked to Moscow. Then there was another factor: the increase in storagewith the 90% exceeding the ceiling (although far from sufficient to survive the winter).

Gas bills, what will happen next year?

While the decline in gas prices may continue, it will not easily return to pre-energy crisis levels. And the real emergency Italy will not have to face so much this year, as in the next winter season, between 2023 and 2024. As he explains Claudio Descalzi, CEO of Eni, that will be the worst winter and in fact it is necessary to increase the storage capacity as soon as possible to be ready. Prices, meanwhile, are not set to drop that much and the bills they will remain elevated for a long time.

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The price of gas is falling: what will happen in the coming months for the bills of households and businesses

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