Fears about gas supplies for the coming winter have further boosted gas prices, with the price breaking €100 for a megawatt hour for the first time on Tuesday, the Financieele Dagblad reported.

The price rise is leading to problems in industries which use a lot of gas and will also impact on consumers, depending on the type of contract they have, the FD said.

Since the decision to phase out the Groningen gas fields because of the earthquake problems, the Netherlands has become much more dependent on foreign imports.

European gas reserves are also extremely low, partly due to the cold winter last year, more demand from Asia and Russia’s reluctance to export more gas to Europe. But gas firms have also been unwilling to boost their supplies because of the high prices, the FD said.

Damage control

On Tuesday, researchers with The Hague Centre for Strategic Studies said that there is little the government can do at the moment apart from exercise damage control.

‘In the short term, much will depend on the severity of the coming winter (not only in Europe but also in Asia), Russia’s willingness to export more gas and the extent to which gas demand goes down at extremely high prices,’ the researchers said.

European leaders are currently discussing gas prices at their summit in Slovenia but a decision on how to tackle the problem is unlikely before the end of the month.

Bills

In the meantime, France has frozen gas prices and Spain has slashed value added tax on energy bills. In the Netherlands, the caretaker government has set aside €500m to offset the price increases but, the FD said, this will only amount to small cut in energy bills which could be hundreds of euros a year more expensive.

The FD said last month that a number of small energy companies in the Netherlands are starting to feel the pinch because of rising gas prices and may be ‘hoping for a mild winter’.

Some may even go bust as has happened in Britain and Belgium, because they have not hedged against the increase in prices, the paper said.

The Dutch energy market was liberalised in 2004 and there are now more than 25 suppliers licenced to offer gas and electricity to domestic consumers.