Swiss Gas Industry Warns of a Risky Winter as Prices Surge

Gas prices have climbed from €28 to almost €73 per megawatt hour since January, putting Swiss households and manufacturers on notice before the cold season begins. The increase reflects the war in the Middle East and a tighter global gas market after the Strait of Hormuz closed, limiting LNG shipments and pushing buyers to compete for alternative supplies.

Daniela Decurtins, director of the Association of the Swiss Gas Industry, says the outlook is unusually difficult to read. European storage facilities are moving in different directions. Germany and the Netherlands have historically low stocks, while France and Italy are better supplied. Switzerland sits between these markets and has no underground gas storage of its own.

The immediate risk is financial. A cold winter would increase heating demand just as traders face fewer LNG cargoes and depleted reserves in key neighbouring countries. Decurtins said prices could double in a worst case. The market has not returned to the levels seen during the 2022 crisis, when prices reached as much as €340 per megawatt hour, but the current rise is already filtering into energy costs and business planning.

Switzerland has no gas storage facilities of its own, leaving the country dependent on regional infrastructure and cross border flows when demand rises. It has traditionally obtained much of its gas through Germany, where storage levels are now among the most concerning in Europe.

That dependence does not mean Switzerland stands alone. France and Italy have stronger reserves, and the European gas network allows suppliers to redirect flows when commercial and political conditions permit. Yet a cold snap across several countries could place all of those systems under pressure at the same time. Switzerland would then compete for imported gas without a domestic reserve to draw on.

The country also occupies a sensitive position in the European network. A pipeline carries gas from France through Switzerland toward Italy. Swiss gas suppliers have discussed retaining some of that gas during an emergency, then purchasing replacement volumes in Italy through an exchange arrangement. The mechanism could provide a limited buffer for Swiss consumers. Decurtins describes it as insurance designed chiefly to protect industry and commerce, rather than a permanent source of supply.

Industry and commerce would feel the pressure before Swiss households faced a complete interruption. Gas is used for heating, but it also powers industrial processes that cannot always switch quickly to electricity or another fuel. Higher wholesale prices can therefore reach factories, bakeries, commercial buildings and eventually household energy bills.

The gas sector says supplies are unlikely to become so scarce that authorities would turn off the tap for homes and industrial businesses. That assessment depends heavily on the weather and on the ability of suppliers to secure cargoes and move gas through neighbouring countries. Several weeks of severe cold would raise consumption sharply. If Germany and the Netherlands entered that period with low stocks, regional competition could intensify.

Swiss companies have already had to plan around volatile energy markets since the European crisis began. For energy intensive manufacturers, another price surge could reduce production margins, delay investment or encourage temporary cuts. Smaller firms may have less room to absorb the increase. Households would face higher heating costs, particularly in buildings that rely on gas boilers and lack affordable short term alternatives. The impact would vary by canton, building stock and supplier contract.