While U.S. natural gas prices increased about 7 percent from 1996 to 1997, the country ranked only 10th highest in a survey of gas prices in 13 industrialized nations. But first-quarter 1998 may tell a different story (see "Gas Price Volatility," Public Utilities Fortnightly, March 15, 1998, p. 38).
Gas Prices in Sweden jumped 30 percent over the last two years to 105.69 cents/therm in 1997, rocketing past an inflation rate of 20 percent. The major reasons for the price surge? Financial pressures placed on suppliers by increased costs necessary to maintain an aging gas network, along with a 4.4 percent increase in gas taxes.
Considerable fluctuation in heating oil prices led to a 20.4 percent increase in German gas prices. Jumping ahead of the tide of deregulation, many German suppliers are offering price incentives to larger consumers in an effort to cement relationships before market liberalization takes effect.
In Britain, a 23.3-percent increase in costs was due to market consolidation, new penalty charges and higher spot prices, which led to tougher pricing policies at major suppliers.