News

4 Reasons Gas Prices are Going Down – An Extended View

           News
news-pic-generic

Since the start of the year, gas prices have tumbled dramatically to historic lows. There are several reasons for this as we shall highlight each in detail.


The decreasing possibility of Russia shutting gas supplies will cause prices to lower. It is not in Russia’s interest to cut off gas supplies as it is facing economic hardship with low oil prices and economic sanctions.

Fortunately, the UK’s exposure to Russian gas is non-existent, so there is no need to worry that we will be cut off. The map below shows the amount of gas imported from Russia. The former Soviet Union states and much of the Baltic nations are at risk, with 100% reliance on Russian gas. Germans and Belgium are second in line, due to a heavy reliance on Russia. France and Italy both have exposure to Russia, but since the UK exports to the continent, there is a slight impact on UK gas prices.

It is no longer in Russia’s interest to cut off supplies. Low oil prices have reduced the government’s revenue, added with economic sanctions, any further loss in revenues would see Russia in a full recession. Unlike the previous cut off, Russia does not have the financial reserves to weather the loss of revenue and will seek a path of collaboration rather than a dramatic stance.


Alfa Energy Group

Alfa Energy Group is an international energy, water, and sustainability consultant partner with 200 employees over 4 international locations. For over 25 years, Alfa has been servicing its clients’ needs through energy and water management, sustainability, and compliance consulting, and an intuitive ecosystem of user-driven energy, water, and carbon management software platforms. With coveted awards, an international industry-wide recognition, and clever simple solutions, today Alfa is partnering with clients to establish and deliver pivotal net zero strategies. Through smart energy management, the expertise and diligence of its people, transparent processes, and data management, Alfa continues to lead through its recognised gold standard of service delivery.