December 8, 2023 RomaniaEnglishRussia

Natural Gas Prices, Quarterly Bulletin, Vol. III, 30.03.2018

  • Editorial

The end of 2017 brought a significant increase in gas prices on the gas exchange. This increase occurred following persuasive actions to induce at market level the idea of gas crisis in the winter of 2017/2018 and of the need to increase gas prices to prevent this crisis. Such a signal attracted the attention of market participants, which panicked and determined a price surge in December 2017 – January 2018. The winter of 2017/2018 was relatively mild, with only two episodes when temperatures fell below the normal minimum levels. These elements determined, after January 2018, corrections at the level of gas prices, reentering a trend similar to that in 2017. Gas prices fell, compared to the maximum level reached in January 2018, trend which will continue during summer months.

  • History and trends of gas prices in Romania

Analyzing transactions carried out during October 2017 – March 2018, on platforms made available by the Romanian Commodities Exchange (BRM), we determined the average price weighted with the amounts of gas purchased for one month and with immediate delivery on the wholesale market and the price of gas purchased over the past 12 months with delivery in the respective month, taking into account all gas sources traded on BRM (domestic, import, storage).

Average weighted price of natural gas purchased over the past 12 months vs. purchased in the current month (RON/kWh)

Price of natural gas purchased to cover consumption peaks vs. price of gas purchased in the respective month; source: BRM


There is a large difference occurred in the price paid by gas buyers in the months before delivery, for the period December 2017 – January 2018, and a small difference between the two practices outside the months of December 2017/January 2018. We notice that the main gas source traded on the exchange was gas from the current domestic production. Analyzing the transactions carried out through BRM, in this period we notice that the price of gas paid for daily acquisitions (2-3 days) was by 14.6% higher than the weighted average price of gas purchased and delivered in the respective month. The difference between gas purchased in the respective month and gas purchased at peak consumption is 2 times higher than the difference recorded in the winter of 2017. It shows the risks of lacking a Network Code that does not encourage speculation, as well as the speed with which speculators learned to take advantage of crisis situations.

Price of gas purchased and delivered in the respective month from various sources; source: BRM


Analyzing the price of the gas offered on the wholesale market through the trading platforms of BRM with delivery in the months of October – December 2017 and January – March 2018, we have estimated a trend of the gas price from the current production on the wholesale market, with monthly delivery. The price of gas during summer will decrease compared to the price at which gas was traded in the winter period, but will not be lower than the price recorded in the warm season of 2017.

Forecasts on gas price evolution (RON/kWh)

Transactions through the exchange on the retail market are fewer than in the previous period or compared to the similar period of 2017. In order to be able to compare the prices of gas traded, as commodity, we determined for each consumer who performed transactions the regulated tariffs and thus deducted the price of gas as commodity. Average prices of transactions performed during October – December 2017 and January – March 2018 no longer present differentiated prices on the 4 consumption categories B1-B4, with prices. Thus, the chart we will present shows how these prices evolve in time, presenting an increase in the price of gas sold in winter months and its reduction in spring months.

Weighted average price of natural gas to end-consumers that purchased gas on the gas exchange (RON/MWh)


  • History and trends of global gas prices

Analyzing the global trends of gas prices, there is a trend of slight decrease in gas prices during summer. CEGH Vienna Exchange, the European gas exchange the closest to Romania, recorded a decrease in gas prices compared to Q1-18 according to futures contracts, by around 1%, customers expecting this gas to be traded in the warm period at RON 86-87/MWh. The experience of the past years allows us to use this price as a benchmark for the price of gas from the Russian Federation sold in Central and Eastern Europe.

History of gas prices and gas price trends on CEGH exchange (RON/MWh); Source: CEGH