The European Central Bank found that wholesale gas-price changes were expected to reach consumer gas inflation within one to three months across more than half of the euro area by inflation weight. A 2026 survey of Eurosystem national central banks showed the pass-through had accelerated since the previous energy shock. The ECB said this suggests shifts in wholesale gas prices may feed through to consumer gas inflation somewhat more swiftly than in the past.
The ECB said the share of the euro area with a slow pass-through of 13 to 24 months had fallen to about 5%, from roughly 40% in 2022. Around one-tenth of the bloc now reported transmission within four to six months, while about one-third reported seven to 12 months.
FASTER GAS TRANSMISSION
The central bank linked the faster transmission partly to increasingly liberalised retail markets, shorter fixed-term contracts and more flexible tariffs. These arrangements connect household bills more closely to wholesale prices and allow suppliers to adjust charges more frequently. Taxes and charges still moderate the pass-through, accounting for 31% of average euro-area gas prices in 2025.
The ECB also stressed that the duration of a wholesale spike matters. Providers that purchase energy years in advance and offer longer contracts can shield customers from short-lived increases, while market-based and flexibly adjusted prices transmit changes more quickly. The result therefore varies across countries rather than producing a uniform inflation timetable.
RENEWABLES WEAKEN ELECTRICITY LINK
Electricity prices were less responsive to gas than during the 2021–22 crisis, partly because renewable generation had weakened the mechanical link between gas and wholesale power costs. The ECB found that wholesale electricity-price increases in 2026 were more modest than in the earlier shock, although outcomes differed across national markets. Spain showed fewer hours in which gas set electricity prices, while Italy remained more exposed to gas-based price-setting.
The ECB said wholesale energy price dynamics require close monitoring, as their pass-through to consumer prices remains an important source of near-term volatility in HICP inflation.