ECB Finds Faster Price Pass-Through for Wholesale Gas in Euro Area

The European Central Bank (ECB) has found that wholesale natural gas prices in the euro area are being reflected in retail gas and electricity prices more quickly than before. According to its Economic Bulletin, changes in wholesale gas prices can affect consumer gas inflation within one to three months in most countries.

However, in around one-third of countries, it may take seven to 12 months for these price increases to be passed on to consumers. The ECB also noted that the share of countries where this process takes 13-24 months has decreased from 40% in 2022 to about 5%.

The report suggests that the shift towards greater generation from renewable sources is partly responsible for reducing pressure on electricity prices in 2026 compared to 2022. Since the conflict in the Middle East began, natural gas prices have doubled and oil prices have risen by around 40%.