The price of natural gas depends on the level of consumption, the consumption profile of an individual customer and the type of agreement concluded, which defines the price setting model. Customers who consume natural gas evenly throughout the year, typically achieve a better price than seasonal customers who primarily use natural gas for heating due to a lesser seasonal effect on prices and better utilisation of transmission capacities.
For customers whose price is set on the basis of a crude oil formula, the selling price of natural gas changes with respect to the value of influential factors that are tied to the price of crude oil and petroleum derivatives, and the value of the US dollar. These types of agreements ensure the greater flexibility of supply and greater predictability of final indexed prices.
The price of natural gas can also be set directly based on supply and demand, which is reflected in the value of the CEGH, NCG and TTF gas indices published by European gas exchanges. Characteristic of these types of products are less flexibility in terms of quantities supplied and greater price fluctuations due to daily changes on the market, which are additionally affected by seasonal factors. The risks of price fluctuations can be mitigated through timely agreement on the setting of a fixed contractual price, which is based on futures indicators of gas indices and remains unchanged for an agreed quantity.
Due to its close proximity, the most important index for Slovenia is the one published on the Austrian CEGH exchange.
So-called hybrid products are the result of combining various methods for setting the natural gas price. Through the appropriate coordination of conditions on crude oil and exchange indices, such products are adapted to the needs of individual customers, taking into account the dynamics of their consumption and aversion to the risks associated with the variability of exchange prices.
