Kabul, (Business News Report)|| Gas prices are expected to remain high next year, 2023, due to a shortage of stocks, especially in the continent of Europe.
The European Commission said it was searching for strategic natural gas reserves, in preparation for the winter season.
The recent lack of supplies led to a rise in gas prices to record levels and a shock to the European economy.
According to a draft plan seen by Bloomberg News, the Commission, the executive arm of the European Union, intends to propose incentives and commitments to ensure the availability of sufficient quantities of gas within the framework of a plan aimed at the security and stability of energy supplies at possible prices.
According to the draft, which is expected to be submitted next month, there will be obligations for the member states of the European Union to have minimum gas reserves by September 30 of each year.
The current shortage of natural gas stocks has reinforced expectations that high gas prices will continue in Europe until at least 2023, which increases pressure on the European Union to enhance the resilience of its energy sector.
In the same context, the German Ifo Institute for Economic Research warned of a rise in oil and gas prices if Russia invaded Ukraine.
Ifo President Clemens Fuest warned of a price shock for oil and gas if Russia invades Ukraine saying that “Even if the supply of gas isn’t restricted, there would still be a price shock, at least temporarily.”
“This would affect private households and industry in Germany in equal measure. Currently, we are forecasting an inflation rate of 4 percent for 2022. If war breaks out, it could be even higher,” he said.
Fuest ruled out stopping energy imports, referring to the interdependence between Russia and Europe, explaining that Western Europe needs Russian oil and gas.
Russia is dependent on revenue money and wants to continue selling gas to Europe in the future, otherwise the European Union will for example get liquefied gas from ships in the future.
Fuest explained that expanding the infrastructure in Germany for this purpose would be feasible in all cases.
In the event of further escalation, Fuest predicted that German inflation would rise as well.
He pointed out that so far, the inflation rate in Germany is expected to reach 4 percent this year, noting that the rate will rise if war breaks out.