Lower winter heating costs anticipated this season
It's sadly time to say goodbye to summer's warmth and prepare for the chillier months ahead. Soon, numerous households will be turning back on their heating systems. However, there's a silver lining: according to Verivox's analysis, this year's heating costs will likely be cheaper than they have been in recent years due to a significant decrease in gas and oil prices.
To be specific, the average cost of natural gas has dropped by about 6% compared to last year, while heating oil costs have decreased by an impressive 23%. This translates to an average gas price of 12.14 cents per kilowatt hour (kWh) in Germany during September 2023, compared to the current average price of 11.41 cents/kWh.
Gas prices also saw a significant drop during the previous heating season, returning to more affordable levels after reaching record highs in 2022. The decline in gas prices is attributed to fluctuations in the wholesale markets. For example, a megawatt hour (MWh) of natural gas was selling for between 50 and 55 euros a year ago on the Dutch TTF exchange, but it now fluctuates between 35 and 40 euros per MWh.
Check out various gas tariffs, fuel up on oil
The cost of gas for individual households can vary greatly depending on their specific tariff. There's a significant price gap between different tariff groups. For instance, the average gas price in the basic supply tariff of local suppliers has dropped from 15.15 cents/kWh in September 2023 to 14.2 cents/kWh in September 2024. Meanwhile, the cheapest offer for new customers has also decreased from 8.88 cents/kWh to 8.75 cents/kWh, albeit still representing a substantial savings over basic supply costs.
Oil customers can also anticipate lower heating bills this year. The average price of light heating oil in September 2023 was approximately 119 euros per hectolitre, but it has since plummeted to around 92 euros. This equates to a 23% price reduction. Thorsten Storck, an energy expert at Verivox, advises that now could be an opportune time for oil customers to refill their tanks, given the rising CO2 price.
Starting January 1, 2025, the cost of a tonne of carbon dioxide will rise from 10 to 55 euros. The CO2 price per litre of light heating oil will then be roughly 17 cents. Compared to 2024, the additional costs for a single-family home with a yearly heating oil consumption of 2000 litres will increase from 287 euros to 350 euros annually. For homes that consume 20,000 kilowatt hours of gas, the additional costs will rise from 194 euros to 237 euros annually. Ultimately, suppliers have the discretion to pass on these increased CO2 prices to their customers.
In light of the analysis by Verivox, households might find it beneficial to seek advice on the best gas tariffs available, as significant price differences exist between various tariff groups. Moreover, oil customers could save money by advising to refill their tanks before the new CO2 price increases in 2025, potentially leading to higher heating bills.
