Wholesale Gas Prices Are Reaching Consumers Faster, ECB Says

The European Central Bank reported on Monday that wholesale natural gas price increases are reaching retail gas bills and electricity inflation in the euro area faster than in previous episodes. ECB economists said the speed of pass-through has accelerated, with most member states now seeing changes in wholesale gas costs reflected in consumer gas inflation within one to three months.

An ECB survey of euro area central banks found a shift toward quicker transmission: more than half of countries expect wholesale gas price changes to affect consumer gas inflation within 1-3 months, around 10% expect a 4-6 month lag, and about one-third expect a 7-12 month lag. The share of countries reporting very slow pass-through (13-24 months) has fallen sharply since 2022, from roughly 40% to about 5%.

Despite the faster pass-through for gas, the report said the impact on wholesale electricity prices has been less pronounced in 2026 than during the 2022 energy shock. The ECB attributed that moderation in part to higher shares of electricity generated from renewable sources, which have reduced the extent to which gas — often the marginal price-setter for electricity — determines wholesale power prices.

The ECB’s commentary comes against a backdrop of elevated energy market tensions: wholesale gas prices have doubled since the onset of the conflict in the Middle East, and oil prices have risen about 40%. The bank has pointed to heightened uncertainty for both inflation and growth, and it had raised its key rate in June and again in September as inflation remained above its 2% target.