Why have gas prices in Europe increased by more than 600% since the beginning of 2021?

When gas supplies are scarce in the world, as is currently happening, the State of Qatar is the “last resort”, according to the description of the British “Financial Times” newspaper.

London – The Europeans met the harshness of the winter, as the spread of the Corona virus and the return to closure, with high energy prices that exhausted their pockets, and pushed a number of energy companies to bankruptcy.

The old continent is facing a record and unprecedented rise in gas prices, which is the main source of heating in European homes, and it cannot be dispensed with as winter enters the winter and temperatures drop to below zero.

Many energy distribution companies are on the verge of declaring bankruptcy, due to their inability to bear the skyrocketing gas prices in the world, which in turn was reflected in the energy bill in Europe.

  • How big is the gas price hike in Europe?

Gas prices in Europe have increased by more than 600% since last January, and they are still continuing their record high until the moment. The price of gas approached $200 per megawatt hour, compared to $20 in January.

Europe is paying the price for its almost complete dependence on its gas needs from abroad, especially from Russia (Reuters)
  • Where does Europe get gas from?

Europe is paying the price for its almost complete dependence on its gas needs from abroad, especially from Russia. Gas supplies to Europe come from Russia, Norway and Algeria by 80%, and the largest percentage remains for Russia through 3 gas pipelines.

As for a country like Germany, it gets 90% of its gas needs from abroad, especially from Russia, while Britain imports two-thirds from abroad to cover its needs.

  • What is the level of gas storage in Europe?

The level of gas storage in Europe has reached its lowest level in 10 years, and since last November, European gas storage has decreased by 14.1 billion cubic meters, compared to a decline rate of 11.1 billion cubic meters in the winter, as the demand for gas for heating increases. Like France, Spain and Portugal they are facing real and unprecedented gas shortages.

As for Britain, it has closed its gas storage station, and its gas reserves are practically non-existent.

Qatar plays a large and important role in filling the world’s natural gas demands (Qatari Press)
  • Which country is most affected?

Britain is one of the countries that has witnessed a skyrocketing gas price, as a third of homes depend on gas to provide energy.

Gas prices in Britain have increased by 250% since the beginning of this year, and from last August to September, gas prices have increased by 75%, which led to the announcement of the bankruptcy of 26 power distribution companies in the United Kingdom, while there is a company that provides energy to more than 1.7 million A citizen under the administrative management of the state after declaring bankruptcy.

Some expectations go to the possibility of declaring the bankruptcy of more than 60 gas distribution companies by next year, if the situation continues as it is.

  • Has the crisis affected the energy bills of citizens?

In Britain, there is a system that prevents gas distributors from exceeding a certain ceiling in determining the energy prices provided to citizens. However, the annual energy bill in Britain has increased by about $180, bringing the maximum price for energy bills from $1,200 annually to $1,400.

European fingers are pointed at Russia for deliberately reducing gas supplies to Europe (Reuters)
  • Is Russia the reason?

European accusations are pointed at Russia, as it is deliberately reducing gas supplies destined for Europe, despite the assurances given by Russian President Vladimir Putin to maintain the normal level of gas supplies.

For example, the gas pipeline “Yamal” owned by “Gazprom”, which crosses through Poland towards Europe, has decreased its supply level by 11% in just two days.

This line is the smallest of the three lines that transport Russian gas to Europe, and is responsible for 10% of Russian supplies to Europe.

  • Why reduce gas supplies to Europe?

Russia says that the decline in gas pumping is due to two reasons, the first is the increase in its internal demand, as well as the increase in Asian demand for gas. On the other hand, Europe says that Russia’s goal is to pressure them to agree to the controversial “Nord Stream 2” pipeline that passes through the Baltic Sea, Which Europe threatens to stop if Russia takes any military action against Ukraine.

European companies are facing great difficulty in obtaining gas shipments, given the strong competition from the Chinese (Reuters)
  • What about China?

The Chinese government has issued a strict decision for all energy companies to store gas in all possible ways, due to the increasing rise in gas prices in the country.

According to Morgan Stanley, China’s internal demand for energy rose by 15% this year, compared to the increase in coal supplies by only 5%, which means that there is an increasing need for gas to fill this shortage, although coal is still the The main source of power generation in the country.

And European companies are facing great difficulty in obtaining gas shipments, given the strong competition from the Chinese, who are showing a willingness to pay more for gas.

According to the Financial Times,fnancial times) The British, the United Kingdom has begun negotiations with the State of Qatar, in order to sign a long-term contract, which would make the State of Qatar “the last resort,” according to the newspaper’s description, when gas supplies are scarce in the world, as is currently happening.

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