The price of natural gas futures on the Dutch-based international exchange, the Title Transfer Facility (TTF), dipped below €80 per Megawatt hour on Wednesday morning. This will not transfer to reduced gas bills in Estonia, however, until February at the earliest.
The price refers to January futures and follows Tuesday's fall to the €80-per-MWh mark, a significant price in Estonia since it is the threshold above which state support measures apply in help with gas bill payment.
From its peak of €300 per MWh in late summer, the TTF natural gas price has continued to fall, to €130 per MWh in mid-December, and to €100 midway through last week.
The drop in price will not reach consumers until February, however, market leader Eesti Gaas notes, since it purchases its gas at the month-ahead index rate.
In any case as noted a price fall below €80 per MWh would mean state support measures, in place October to March, would cease to apply.
These stand at 80 percent reimbursement of that component of a gas bill which exceeds the €80-per-MWh price level, and is automatically applied to domestic consumers' bills (a consumption cap is also in place, beyond which support no longer applies).
The reason gas prices have fallen through the autumn and winter – a time when prices were forecast to rise in fact – relates mainly to the mild winter experienced in Europe as a whole, along with soaring general inflation.
These two factors have had the effect of driving down demand, meaning there will likely be no shortage of supply this winter, which again inhibits price rises.
The price of natural gas had, as with other energy prices, started to climb significantly from late summer 2021, picking up the pace with Russia's invasion of Ukraine in February this year.
Editor: Andrew Whyte, Barbara Oja