Gas Prices Expected to Decrease in the Czech Republic

The prices of natural gas in the wholesale market are currently favorable, leading to a reduction in prices for indefinite-term contracts by more than a fifth by Pražská plynárenská (Prague Gas Company). Martin Pacovský, the CEO of Pražská plynárenská, stated that if nothing unexpected happens, it would be a suitable time for customers to consider fixing the gas price for a longer duration. Gas prices are currently around 30 euros per megawatt-hour and are expected to fluctuate between 30 and 50 euros.

The stability in the wholesale gas market is attributed to the relatively high gas reserves from last year and lower-than-expected demand for replenishing storage. This surplus of gas has resulted in the current favorable prices. However, it is uncertain how the replenishment of storage will proceed. Pacovský believes that there should not be any problems and that there will be an adequate supply of natural gas for the upcoming winter.

The decrease in gas prices in the wholesale market is anticipated to reflect in consumer prices gradually. Pacovská plynárenská plans to lower the cost of natural gas by an average of 23% for indefinite-term contracts starting from June 1. Similarly, the price of electricity will also decrease by approximately 19% from the same date. The expected savings for households using natural gas for cooking and water heating, consuming four megawatt-hours annually, are estimated to be around 2,700 Czech korun (CZK). Additionally, a family using gas for heating and consuming 11 MWh per year could save approximately 7,400 CZK annually.

Pacovský mentioned that customers affected by the price reduction would receive revised advance payment schedules in the coming weeks. The CEO advised that customers consider fixing the gas price in July or August, depending on their preference. It is important to note that despite interventions by the government, the gas market has remained resilient and is functioning as intended.

During the previous heating season, residents and businesses in Prague managed to reduce their gas consumption by 17% on the distribution network of Pražská plynárenská Distribuce, surpassing the EU member states’ commitment to minimum savings of 15% compared to the five-year average from September to March.