Germany’s municipal utilities expect gas and electricity tariffs for end customers to remain high and a doubling of the level before the energy crisis. In view of the fall in wholesale prices, “of course the municipal utilities also want to lower the tariffs and do so as soon as there is room for maneuver,” said Ingbert Liebing, general manager of the Association of Municipal Enterprises (VKU), the “Neue Osnabrücker Zeitung”.

However, he warns against false hopes: “According to our assessment, it is foreseeable that gas and electricity tariffs will double.” He did not name a period of time. The crisis is no longer quite as dramatic, but not over.

Liebing rejected the accusation by consumer advocates that municipal utilities demanded “moon prices”. “The current spot market and futures prices are not yet so cheap that they are already having a sustained price-lowering effect. They would have to fall further and, above all, permanently,” he said.

Association: Wholesale prices almost four times higher than before the crisis

The Federal Association of Energy and Water Industries (BDEW) also called the current fall in gas wholesale prices a good sign, but this is still no reason to sound the all-clear. Most recently, wholesale gas prices have fallen, and for a few weeks now they have been around EUR 70 per megawatt hour (MWh) on the futures market.

This roughly corresponds to the level at which prices were moving shortly before the start of the aggressive war in Ukraine. However, wholesale prices are still almost four times higher than before the crisis years. On average for the years 2015 to 2019, the average wholesale gas price was around EUR 18.50 per MWh. In addition, the price development in gas wholesale remains volatile. Nobody knows how prices will develop in the coming months.

Thanks to the long-term procurement strategies pursued by most energy suppliers, the drastically increased exchange gas prices did not have a one-to-one and direct impact on end customer prices, the BDEW said. A large part of the energy that was delivered to end customers last year was bought at lower prices before the crisis. The purchase price, which has now fallen temporarily, will only affect end customer prices later, said Kerstin Andreae, Chair of the BDEW Executive Board.