Gas prices forecast to drop by a third in February

A gas hob.
A gas hob. Source: Priit Mürk/ERR

Natural gas prices for domestic consumers are forecast to drop by a third in February and potentially fall even further if the weather is mild.

Next month, price packages for Eesti Gaas and Eesti Energia customers will drop to €1.25 euros per cubic meter, Tuesday's "Aktuaalne kaamera" reported. The current price is €1.75.

The last time prices were so low was in March 2022.

"As stock market prices have fallen, there is a case for lowering prices for consumers," said Eesti Gaas board member Raul Kotov.

Alexela customers will be able to choose between two packages.

"In the variable package, we have lowered the price to €1.3 per cubic meter, and the fixed price is €1.25 per cubic meter for 12 months," said Alexela's energy portfolio manager Kalvi Nõ.

Will prices continue to fall?

Gas prices have slumped to around €70 per megawatt hour over the last 10 days. A new record of €340 was set last August.

Companies are not in agreement about future gas prices.

Nõ does not believe prices will fall much further as the weather is still cold.

"At least the start of the winter has been warm and that gives hope that prices below a €100 are the new normal, so to speak. Rather, I don't see them getting any cheaper, or at least significantly cheaper. It seems that the €70-€80 euro is the lower limit, but yes, there is some risk of an upward (rising) trend," said Nõu.  

But both Eesti Energia and Eesti Gaas think prices will continue to drop.

"It all depends on what the equipment situation will be, what the consumption will be, what the weather will be. So one would hope that this price level, €70 plus or minus, could be what it is in the coming months and then decisions can be made. If the price is €70 or falls further, for example, then we will certainly have a reason to lower the price," said Kotov.  

Estonia will not face security of supply issues either. Eesti Gaas, which has the highest market share, will bring additional supplies to the region in January and March through Lithuania's Klaipeda terminal.

"We have also started to communicate with the Finns to get possible shipping times at Inkoo as well," said Kotov.


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Editor: Marko Tooming, Helen Wright

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