Gas prices in Europe reached their highest level in just over a year on Friday, driven by low winter temperatures and supply concerns following the suspension of Russian gas transit through Ukraine. Italy has called on the European Commission to prevent a price shock.
At the benchmark Dutch digital exchange TTF, the price of a megawatt-hour of gas for February delivery stood at 50.4 euros yesterday morning, the highest since late November 2023. Shortly after noon, the price stabilized at 50.13 euros per megawatt-hour.
Since mid-September, gas prices at TTF have risen by approximately 40%. The lowest price last year was in March when a megawatt-hour cost 29.13 euros.
The price spike at the beginning of 2025 was triggered by Ukraine’s decision to halt Russian gas transit following the expiration of a transit agreement.
The Minister of the Environment and Energy Security of Italy, Gilberto Pichetto Fratin, emphasized on Friday, after the price surge in the early days of 2025, that the European Union (EU) should again extend the crisis price cap on gas, which is set to expire at the end of the month.
The EU introduced the price cap at the end of 2022 to curb the sharp rise in gas prices caused by sanctions on Russia and the suspension of Russian gas deliveries through the Yamal-Europe and Nord Stream 1 pipelines, the latter of which was destroyed in an explosion.
The Commission set strict conditions for activating the price cap, such as halting trading on exchanges if the price at TTF exceeds 180 euros. The mechanism is also triggered if the TTF price exceeds the global liquefied natural gas benchmark by 35 dollars for three consecutive days.
Prices subsequently fell due to mild winters and full gas reserves, so the mechanism was never activated.
On Friday, the Italian minister also called on the EU to significantly lower the price cap to prevent a potential price shock.
“I believe the EU should reintroduce the price cap at this time, but not at 180 euros – it should be 50 or 60 euros,” said the Italian minister in an interview, adding that Italy has enough gas in storage to ensure normal supply for the next two months.
