Gas prices in Vienna, and Austria as a whole, are set to rise in coming months with the shocking news the gas price index (ÖGPI) calculated by the Austrian Energy Agency was five times higher in September than a year ago.
The reason? Simple supply and demand economics.
According to Karina Knaus at the Center for Economics, Consumers and Prices at the Austrian Energy Agency (in German Centers Volkswirtschaft, Konsument:innen und Preise), the reason for the price increase was higher demand.
This was due to lockdowns and work-from-home initiatives in Austria the past year causing more people to use energy in living spaces they would not generally be occupying during a normal year.
On top of that, as global production of most goods and services is starting up again as more countries move away from Covid-19 lockdowns and other restrictions, even higher demand will likely cause gas prices in Austria to rise even further.
According to ORF, people living in Vienna or elsewhere in Austria who buy their household energy via ‘floating tariffs’ are likely to be impacted first.
That is because, in the energy contracts they have, the price changes monthly depending on the current wholesale price index.
Of course, increased gas prices will also reach the rest of us. Just at a later date when our energy bills are reassessed at the end of the contract period.
Higher prices for gas in Austria are not just affecting the Alpine country alone, however, as prices are rising worldwide.
There is also not expected to be a significant decrease in Austria’s gas prices until next spring when heating and other energy demand, which always increases during the country’s cold and dark winters, should weaken.
One bright spot that should be added to the news, however, is from Karina Knaus, who commented to ORF:
In general, household gas prices in Austria are rather sluggish, so temporary and short-term movements on the wholesale market – neither upwards nor downwards – are usually not immediately passed on to the households, since procurement in this segment will also take place over the long term.
In other words, gas prices in Austria will still likely increase, but not as drastically as one may expect.
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