ECB says gas prices are passed through faster — OilPrice

In the euro area, increases in wholesale natural gas prices may be reflected in retail gas prices and electricity price inflation more quickly than before. This was reported in the European Central Bank’s Economic Bulletin, OilPrice reports.

Timeframes for price pass-through

According to ECB economists, in most euro area countries, changes in wholesale gas prices may affect consumer gas inflation within one to three months. In around one-tenth of countries, this process is expected to take four to six months, while in around one-third it may take from seven to 12 months.

At the same time, the share of countries where the pass-through of wholesale prices to retail prices could take 13–24 months decreased from around 40% in 2022 to about 5%. The ECB noted that gas and electricity still show a general tendency for delayed and uneven transmission of wholesale price changes to consumers.

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The role of renewable generation

Pressure on electricity prices in 2026 has so far been lower than in 2022, partly due to an increased share of electricity generated from renewable sources. ECB economists explained that the impact of wholesale gas prices on wholesale electricity prices has weakened because of the shift towards greater generation from renewable sources.

According to the report, since the start of the conflict in the Middle East, natural gas prices have doubled and oil has risen by around 40%. In September, the ECB raised key interest rates for the euro area by 0.25 percentage points; the regulator said inflation exceeds 3%, compared with its long-term target of 2%.