Pipeline still full

Expert on gas supply stop: Prices remain stable

(Bild: Proxima Studio - stock.adobe.com)

Following the gas supply freeze to OMV from Russia, Austrian consumers do not have to expect any noticeable price increases in the upcoming heating season. "Such a situation has already been expected on the markets. In addition, suppliers have largely hedged their prices for this winter," says E-Control economist Johannes Mayer. 

The consequences of the supply freeze are also likely to be minimal for customers with variable contracts. "If you have such a contract, you will feel the effects slightly. But the impact will be permanent." Consumers with so-called float tariffs will face a maximum increase of one to two euros per month as things stand, Mayer estimates.

Gas price increased briefly
On Friday, the wholesale gas price rose to just under 47 euros per megawatt hour (MWh), but over the course of the day the price calmed down again to the level before the announcement of the supply freeze to OMV, which has been in force since 6 a.m. today.

Following Gazprom's supply freeze, the wholesale gas price rose briefly, but quickly returned to the level prior to the announcement.

(Bild: AFP)

The suspension of deliveries had little impact on prices on the European market anyway. "OMV is only a contractual partner of Gazprom. What's more, the transit contract through Ukraine runs until the end of the year," the expert pointed out.

Longer-term forecast difficult
In the longer term, i.e. beyond the winter of 2024/2025, the development of the price level is currently difficult to predict. "We can already see that the markets are nervous," said Mayer. From today's perspective, however, the market is assuming that prices will remain stable in the fourth quarter of next year. "That's good news for households."

Former OMV CEO Gerhard Roiss is less optimistic. In his opinion, there could very well be increases. On ORF radio on Saturday, he therefore pleaded for the government to take countermeasures, for example by releasing partial quantities from the gas reserve in order to increase supply on the market and thus stabilize prices. Gewessler expressed his opposition to this. "I would advise caution here, we should not give up our safety cushion without necessity."

FPÖ and NEOS warn against price increases
In addition to Roiss, the FPÖ and NEOS also warned of possible price increases on Saturday. The FPÖ also used the suspension of deliveries to OMV as an opportunity to criticize the Turkish-Green government, which had brought about the delivery stop with its policies. For its part, the ÖVP reacted with criticism of the energy policy of the Freedom Party, which had repeatedly voted against security of supply measures in parliament.

However, the supply freeze should only affect OMV. Russian gas continues to flow to the Baumgarten hub in Austria via Ukraine, albeit to a slightly lesser extent, the regulatory authority E-Control announced in a press release. It is not known who owns this gas, "but gas is coming in", explained Mayer. The incoming gas could now be traded directly on the exchange, E-Control told APA.

OMV resorts to alternative sources of supply
It initially remained open as to whether OMV could obtain Russian gas from alternative sources in future, for example from Slovakia or other market participants. "Over the past three years, we have made great efforts to diversify our supply sources and transportation capacities with non-Russian gas. In the event of an interruption in supply from Gazprom, we will primarily fall back on our alternative sources of supply and supply our customers reliably and without interruptions," it said.

The background to the gas supply freeze to OMV is the ruling of an arbitration court, which awarded OMV 230 million euros in damages. OMV subsequently announced that it would cease payments to Gazprom in order to recoup the millions awarded. Federal Chancellor Karl Nehammer (ÖVP) emphasized on Friday evening that the delivery stop was manageable for Austria in view of its full gas storage facilities. OMV itself and E-Control also sought reassurance in this regard.