By Michael Kern of OilPrice.com
The surge in wholesale natural gas prices is set to pass through the retail and electricity inflation in the Eurozone faster than in the past, the European Central Bank (ECB) said in its Economic Bulletin on Monday.
While the pass-through is faster and can manifest in the inflation numbers within one to three months for most Eurozone members, the pressure on electricity prices has been lower so far in 2026 compared to 2022, partly due to the higher shares of electricity generated from renewables, the ECB’s economists wrote.
“The impact of wholesale gas prices on wholesale electricity prices – which is typically strong with gas prices being the marginal price-setter for electricity prices – was dampened by a shift towards electricity generated from renewables,” they noted.
Natural gas prices have doubled since the start of the conflict in the Middle East, while oil prices have increased more modestly, by about 40%.
For Europe, soaring energy prices have rekindled inflation fears in Europe mostly due to the spike in wholesale gas prices.
The Iran war and the intensified competition for spot LNG supply from Asia came just as Europe was trying to build in the spring and summer natura
