Gas prices in Europe now ten times higher than in US

Gas prices in Europe now ten times higher than in US
Credit: Belga/Kurt Desplenter

While it has become impossible to miss that prices for liquefied natural gas (LNG) in Europe are breaking records in recent months, they are not just disproportionally high compared to previous years but also compared to the prices in other parts of the world.

The wholesale prices for gas and electricity are so out of proportion that a market intervention is necessary, stated Belgian Prime Minister Alexander De Croo during a press conference following the Consultative Committee on energy prices on Wednesday.

"Today, we see that gas prices in Asia (€150/MWh) are half those in Europe (€300/MWh)," he said. "In the United States (€30/MWh), they are even ten times lower than here. This makes it clear that it is possible to have lower prices without creating shortages."

Price does not reflect production costs

De Croo stressed that there is "no reason" for gas prices in Europe to be staggeringly higher than in other parts of the world when it is only transported to Europe for a few euros per Megawatt-hour.

Like the high gas price, the wholesale price for electricity no longer reflects the production costs of a kWh of electricity, as a large part of this is generated by (renewable and nuclear) production units that are not confronted with rising fuel costs.

In Europe, there is a deep gap between costs and prices, emphasised De Croo. "The market no longer functions, so we have to intervene. That is why, since March, Belgium has been arguing at the European level for a ceiling on gas prices, and for a review of electricity prices."

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While, at first, De Croo's request was only backed by leaders from France, Italy and Spain, an increasing number of country leaders have become convinced that blocking the gas prices at the European level is the only way out of this crisis.

"It is only at the European level that we will succeed in bringing prices down, only Europe can stop the bleeding today," he said. "And I will continue to work, day after day, until all 27 countries are convinced, with one goal: to ensure that gas prices can be blocked."

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