By Teddy Nwanunobi
As record prices have made the fuel prohibitive for many consumers, Europe’s industrial sector has started to cut demand for natural gas.
Average consumption to-date in October is 12 per cent, lower than its pre-pandemic level, according to data compiled by Paris-based consultancy Engie EnergyScan.
“We are starting to see the beginning of a demand destruction trend in the industrial sector in Europe”
Gas consumption had already started to fall in September, down 5 per cent from the 2019 level.
“We are starting to see the beginning of a demand destruction trend in the industrial sector in Europe. Germany, the Netherlands and the U.K. are showing the largest reductions so far but we really need to wait for a few weeks to see if the trend is confirmed, notably when gas demand for heating will increase,” head at Engie EnergyScan, Julien Hoarau, said.
Natural gas prices have hit fresh records almost daily recently, just before lower temperatures start to increase demand for heating in the region.
Some energy-intensive companies have temporarily shut operations because they are becoming too expensive to run.
The crisis has also broken power suppliers and weighed heavily on European consumers’ pockets.
Europe’s benchmark gas contract has retreated in recent days, in the hope that Russia will increase flows.
However, it has remained up fourfold this year.“High gas prices can slow down the economic recovery in Europe as industrial users are already suffering with it,” Hoarau added.