European energy markets are going through a period of explosive price increases.
Governments in the region needed to take unprecedented action to help consumers, individuals or legal entities, who were at risk of defaulting on their electricity and gas bills.
In Romania, for example, in February the market intervened again, with new support measures, regarding the compensation of invoices and the capping of prices. But where did all this increase come from?
We all hear about the inflationary wave, but what is the real source of the price increases?
It is impossible not to have heard, in recent months, various explanations from analysts, which justify, in one form or another, the current price increases. Most support the idea of out-of-control inflation, but very few people know what the whole picture was that generated the current price explosions.
First of all, it should be noted that we are talking about a decrease in Europe’s gas production.
“Europe’s domestic natural gas production fell by a total of 3.31% last year compared to 2020 and by more than 10% compared to 2019, the year before the COVID-19 pandemic, to 204 billion cubic meters (mmc), over time gas demand in the Old Continent increased by 5.74% in 2021 compared to 2020 and exceeded by 2.8% even before the pandemic, reaching 552 mmc, according to data aggregated by the International International Energy Agency (IEA) ”, according to the data analyzed by profit.ro.
Finally, according to the quoted source, we must not lose sight of the fact that the deliveries of Russian gas to the Member States of the European Union, through the transit pipelines from Ukraine and Belarus, were reduced by 3% last year, despite Gazprom’s production growth, and Europe-wide liquefied natural gas (LNG) imports were 4% lower than in 2020.