Earlier this year an investigation was commissioned into gas prices across Europe. This was undertaken by the Austrian energy regulator after huge disparities were found across each of the countries. Startling inequalities between not only cost but also the value of gas were exposed in the report.
The report was based on 2011 gas prices. At the time wholesale gas prices were soaring as upheavals in Libya and Egypt were making transport of acquisitions very difficult. Further affecting the prices was the difficulty of procuring liquefied natural gas after the Japanese nuclear disaster.
Gas Company Profit Margins
In the months following the report wholesale prices have plateaued and begun to fall but almost scandalously the savings being made by suppliers are still being held back from customers. Gas company profit margins across the continent are booming.
In Great Britain, the media is rife with criticism of fuel companies but it seems situations could be a good deal worse! Denmark for instance, has to pay a whopping three times as much to cook their bacon than their British counterparts. In Britain customers were paying on average 4.76 euro cents per kwh equivalent compared to the Danish bill of 12.14 euro cents. The Danes pay twice the EU average of 6.99 euro cents per kwh equivalent.
Where Does Your Gas Bill Payment Go To?
Also compared were the amount of the cost attributed to buying the actual gas and how much went to pay for distribution and government levies. Poor old Denmark seems to have grounds for argument again, with only 36% of their money actually paying for their gas. 17% pays for their gas distribution and 27% for taxes and a further 20% for VAT. The Danish householder pays almost half of their gas bill in duties.
Luxembourg by contrast has a very low tax regime and 76% of their energy costs go in buying gas. They pay only 6% in VAT, 2% in energy taxes and 17% for distribution. Spain pays no energy taxes but 43% of their bill pays for distribution costs.
Gas Price Fluctuations
Gas prices do tend to mimic wholesale gas anomalies and so the upheavals in the Middle East caused large impacts in several countries. Belgium for instance saw their prices leap up by 27%. There was, in fact, no country in the EU which saw no price increases.
Small scale rises of 5% were seen in the Netherlands and Northern Ireland whereas most of the EU suffered increases of an average of 13%. Greece, in all of its economic hardship, saw their prices rocket by an enormous 30%. In all cases gas increases were larger than price increases seen in the electrical markets.
Does Switching Suppliers Save?
The report was commissioned after anomalies were identified in an initial investigation in 2009. From that point onwards observations were made into the effectiveness of switching suppliers as an effective means to save money.
Although commonplace in Great Britain, other countries on the continent were less likely to exploit possible savings. On average it was found that even bigger savings could be found by switching gas supplier than electrical ones, with most households able to shave 13% off their bills.
By far the biggest winners of switching electrical suppliers were Sweden where, along with Finland, residential gas supply is almost obsolete. Since they use next to no gas now, as gas heating is virtually unheard of the potential energy savings in these households were mammoth.
German households were able to find savings as large as 36% off their gas bills. Interestingly countries which had their default prices set by their governments, (France, Spain, Portugal and Greece) could not improve their costs by changing suppliers.
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The conclusions of the report were that switching suppliers remains the single biggest way to ensure the best value available to you. British gas prices remain low compared to our EU neighbours, despite profiteering by the energy companies.