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Russian gas costs very little: it is the EU that sends the price skyrocketing

Russian gas costs very little: it is the EU that sends the price skyrocketing
Written by aquitodovale

Russian gas which represents almost 40% of Italian imports it costs very little. It arrives in Italy with a price of around 18 cents per cubic meter: one of the lowest figures in the whole of the European Union. But the EU would like to deprive us of Russian gas, given that Italy has agreed to pay for it in rubles and that this, at least according to the spokesman for the European Commission, could lead to an infringement procedure.

On the cost of imported gas in Italy, however the EU rules are inserted according to which the price of gas is formed through exchanges on the stock exchange. In practice, the price of gas that applies to everyone is the highest price anyone is willing to pay: Europe is asking us for it! The result is that the bills are astronomical.

The latest report on the gas market published by the European Union shows the import prices of gas in Italy. It refers to the quarter October-December 2021 and indicates the average figure for that period. Contains the map shown below. Prices refer to the MWh. One MWh corresponds to approximately 100 cubic meters of gas. There is a nice detail relating to Italy.

Thus, the average import price of Dutch gas at the Italian border in October-December was 17.70 euros per MWh. However, Dutch gas represents just 2.9% of Italian imports. In ascending order, they come next Russian gas (38.2% of Italian imports), with 18.96 euros for MWh; Algerian gas (27.8%), with 19.95 euros; and gas from Azerbaijan (9.5%), with 60.30 euros. Furthermore, the LNG or liquefied gas (13.1%) that arrives by ship recorded an average import price of 41.54 euros for one MWh, that is always for about 100 cubic meters. With the exception of Azerbaijani gas, gas import prices in Italy are the lowest among those shown on the EU map for gas arriving in the various countries through gas pipelines (the initials EBP) or by ship.

The busillis, or the reason why we pay much, much more for gas, is in that abbreviation “HUB” shown on the map, to which in each country corresponds the highest figure: for Italy, € 95.84 for one MWh of gas. Represents the price of gas traded on the stock exchange: the keystone of the EU system.

How much did a cubic meter of gas cost Italian families at that time? Direct comparison is impossible: both the price of the cubic meter (plus there are government taxes) and the frequency with which the bill arrives depend on the contracts. Mostly you have to pay it every two months: and in this case, in the quarter October-December 2021, two bills overlapped, often with as many different gas prices.

However the price of gas established by ARERA can be taken as a completely empirical reference point (Regulatory Authority for Energy, Networks and the Environment), which every three months updates the so-called “enhanced protection” economic conditions. Well, on the basis of the months prior to January 1, 2022, ARERA has set in 91.36 cents per cubic meter the raw price of gas supply. Plus taxes and ancillary costs.

That is to say, the “higher protection” price of gas for Italians, net of various taxes, was four to five times higher the cost at the border of Russian and Algerian gas (the bulk of imports), respectively equal to 18 cents and 19-20 cents per cubic meter

The rise in prices is a “Europe asks of us”. That is, it follows from the fact that the keystone of the EU is the price of gas traded on the stock exchange, and not its actual cost. Another “Europe is asking us” will predictably be to do without Russian gas, which is so cheap. With that the price of gas traded on the stock exchange can grow even more.

GIULIA BURGAZZI

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