Faced with sharply rising procurement costs for natural gas, economist Gabriel Felbermayr is calling for European and Asian nations to consolidate their market power well before the summer months. This consolidation, he suggests, would be necessary to refill gas storage facilities at affordable prices.
According to the economist, who spoke to the Funke media group’s newspapers on a Friday, “We need a European solution, a kind of purchasing cartel among the EU states, ideally supplemented by Asian countries”. He warned that without such cooperation, there is a risk that countries will engage in bidding wars when procuring gas.
Felbermayr added that the “big race” among all companies and nations for available gas supplies will begin by August at the latest. He cautioned that this competition could further drive up prices, an increase that would subsequently be reflected in consumer bills.
Historically, gas prices, alongside crude oil prices, had spiked on world markets during the Iran war. Currently, a significant portion of global liquefied natural gas trade passes through the Strait of Hormuz, which the Tehran regime had largely restricted due to ongoing conflict.
Felbermayr, who has been part of the German Council of Experts for Economic Policy (Sachverständigenrat) advising on the overall economic development since March, is also the director of the Austrian Institute of Economic Research (WIFO) in Vienna.