GAS PRICES EXPECTED TO FALL

After months of being fixed at the maximum rate, the Price of a bottle of butane gas is likely to finally decrease, after winter.

In view of a fall in wholesale prices, industry experts now predict a fall of 5% in April, which would result in a canister of gas costing 16.60 euro, as opposed to the current price of 17.50. Not only that, if the trend continues, it is expected that the price may well fall by 20% by the time we reach next winter, falling throughout the year to around 15 euro in the summer and then reaching 14 euro at the end of the year.

This is in view of the new quarterly review mechanism that was put in place by the government, hence the reason why the savings take longer to pass to the consumer.

There is also a considerable deficit which the government are trying to recover on behalf of the industry, a debt which we, the consumers, have to stand. In early 2014 the tariff deficit was around 60 million euro, but since the wholesale prices fell in October, we have been continuing to pay the higher price since then, and so by March or April this year the tariff deficit will have reached zero and the Ministry of Industry will be able to revise the final price downwards for us too. The maximum price was frozen at 17.50 until 2016, in order to allow time for more stability, although there was also a built in review for 2015.

The potential risk to the consumer now is that because of falling demand in gas, partly due to warmer weather, partly due to an increase in piped gas, and partly due to the fact many people simply can´t afford to buy it at the higher price, the industry are now suffering the loss caused by the reduction in demand and are not likely to take that drop lightly. According to the data from the gas companies, the demand for butane closed 2014 with a fall of 7.5%, or 70,000 tonnes.

With the continual fall in wholesale prices expected, the gas industry may well appeal to the government to allow the prices to remain high, as they do not want to be the ones who lose out at our expense.

Filed under: http://www.theleader.info/article/46206/

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