ECB Finds Gas Prices Passing Through Faster in Euro Area
The European Central Bank (ECB) has found that gas prices are being passed through to consumers more quickly in the euro area. According to the ECB's Economic Bulletin, changes in wholesale natural gas prices can affect consumer gas inflation within one to three months in most countries. In some cases, this process takes longer, with around one-third of countries experiencing a delay of seven to 12 months.
The report also notes that the share of countries where the pass-through of wholesale prices to retail prices takes more than 13-24 months has decreased significantly, from around 40% in 2022 to about 5%. This suggests that gas and electricity price changes are being transmitted to consumers more rapidly over time.
The ECB also attributes a decrease in pressure on electricity prices in 2026 to an increased share of renewable energy generation. Since the start of the conflict in the Middle East, natural gas prices have doubled, and oil has risen by around 40%. The ECB raised key interest rates for the euro area by 0.25 percentage points in September due to inflation exceeding 3%, which is above its long-term target of 2%.