Natural gas price expectations. This time last year, it was a hot topic. And still is. The energy market continues to move. So do natural gas prices. As the main source of energy for Dutch households, and also for many companies, something to keep an eye on. So too for us. Because as the price of natural gas increases, so does the demand for propane gas. So in this blog we share our views on the development of natural gas prices and what to expect in 2024.
Taxes on natural gas have been increasing for years. And not without reason. The government wants to reduce the consumption of natural gas with the goal of being completely natural gas-free by 2050. By raising prices, more people will consider switching to alternatives. The initiative is driven by climate considerations, and many Dutch families, as well as businesses, are feeling this change in their pockets.
From January 2024, the tax on natural gas will be increased by 10 cents per cubic meter, representing an annual increase of about €90 for an average household with average energy consumption. This measure was implemented as part of broader initiatives to reduce the use of fossil fuels and promote more sustainable energy sources.
In addition to rising taxes for households in the Netherlands, there is currently a lively debate about the benefits for large consumers of natural gas. The energy tax per cubic meter of natural gas drops sharply as consumption increases. For this, see the table below. To the displeasure of many Dutch people. The Dutch government seems to want to adjust these benefits in the near future.
An increase in the energy tax can have both a positive and a negative impact. Large consumers of natural gas will be more likely to look at alternatives. In these cases, propane gas can serve as a substitute for natural gas in times of transition. However, if the costs do not outweigh the benefits, companies may also decide to move. For businesses, this is usually not desirable. Still, it can be a lucrative decision for large consumers.
The table below shows the trend in natural gas energy taxes. This affects our expectation of what natural gas prices will do.
Propane gas, like natural gas, is a hydrocarbon gas. Although they are often used in similar applications, there are some differences in their properties and construction.
The price of natural gas is to some extent linked to that of petroleum derivatives, although in recent years they have fluctuated somewhat more independently based on supply and demand, geopolitical events and other market factors.
Switching to propane gas can be financially attractive. The price of propane gas is often competitive with the price of natural gas. However, price is not the only thing you should look at. In addition to price, the space available to place a tank is an important issue, and security of supply is also important. This is because propane gas is stored in a tank and therefore needs to be refilled from time to time.
As a propane gas supplier, however, we offer security. By using telemetry, we ensure that your tank is refilled on time. We are also the only propane supplier with our own gas terminal. So with OK GAS as your supplier, you are never without gas.
If you are considering switching to an energy source other than natural gas because you want to review your current energy costs, for example, now may be the time to consider your options. We are here to provide you with advice and present you with the option of a propane tank. We are happy to unburden you! If you would like to know more please feel free to request a free quote or contact us directly!