Spain records cheaper gas prices than the European reference market for the first time. The reason for lower gas prices is Spain’s reduced dependence on Russian gas. It seems that Spain is also partially escaping the collective EU gas savings.
The Spanish gas market, organised under Mibgas, makes this conclusion and compares the price levels with the European TTF reference market, a virtual location for natural gas in the Netherlands.
European gas prices highest in history in March 2022
The report of the Spanish National Commission on Competition and Market Forces (CNMC) states that after already high gas prices at the end of 2021, March 2022 prices are likely to have reached one of the highest levels in history. The regulator’s report states: “The European market, especially Germany, the Netherlands and Italy, is most dependent on Russian gas. Therefore, it maintains above-average prices.”
According to the CNMC, 2021 was an atypical year as 2020 saw very low demand with low gas prices, due to the pandemic. From October 2021, both demand and gas prices skyrocketed due to several factors;
- low level of underground gas storage
- limitation of the supply of Russian gas to long-term contractual quantities
- uncertainty and tensions between Russia and Ukraine
- delays in commissioning the Nordstream 2 pipelines
Will Spain be exempted from EU gas savings plan?
It was recently announced that an agreement had been reached on the European gas emergency plan. The European Commission’s plan is for each country to save 15% on gas until the end of March 2023. Immediately after this announcement, southern countries revolted and it was doubted whether it was fair that each country should save the same amount.
The German news agency DPA reports after statements by anonymous diplomats that some countries do not (fully) have to comply with this saving. Spain, among others, objected because the country hardly uses Russian gas. At a later date, the EC will announce the extent to which all EU countries must comply with these savings. The fear is, however, whether the targets will be achieved if several countries are partially excluded from the collective savings.
Also read: Gas supplies to Spain
