On Wednesday, energy company Enovos announced an unprecedented increase in natural gas prices in Luxembourg.

Enovos confirmed the information shared on Tuesday by Minister for Energy Claude Turmes. The energy supplier announced a "significant increase" in natural gas prices beginning in October.

"For a typical 4-person household with an average consumption of 3,300 m3/year (36,300 kWh/a) the total annual cost including VAT will amount to +/- 5,400 €/year (without grid costs, currently subsidised by the state). Without state subsidy of the grid costs, the price would be € 6,070/year (including grid costs)", Enovos writes in a statement released on Wednesday morning.

On the basis of this theoretical calculation, this would represent an increase of 68% (grid costs included) or even 77% (without grid costs) compared to the current pricing. It should be noted that the Luxembourgish State has undertaken to pay the grid costs until 31 December 2022. Beyond this date, no guarantee has been given at this stage.

According to Enovos, rates are strongly dependent on supplier prices in European markets. Because of the current geopolitical scenario, these prices remain "extremely volatile". Prior to the summer of 2021, the price per MWh ranged between €20 and €30, but it has since risen tenfold to between €200 and €300.

Another important factor is the level of demand. In fact, consumer behaviour will also impact future market pricing, hence the importance of energy savings. Enovos has set up a website (available only in French) that details the steps to be taken in order to consume less energy.

Other suppliers in the country will have little choice but to adjust to European market prices. In concrete terms, this means that rates will increase for all consumers, regardless of the supplier chosen.