LONDON - European wholesale gas prices have fallen from record peaks reached after producer Russia's invasion of Ukraine, but energy bills remain sky-high despite government help aimed at easing consumers' pain.
In Britain and the European Union, the impact of soaring gas and electricity bills has been cushioned to an extent by state aid measures that seek to soften the blow of decades-high inflation.
But consumers still face unusually high bills, even if the worst of the winter has yet to come in the northern hemisphere.
"Energy bills will go down but there is a lag in the reaction because the utilities buy forward on the wholesale market a lot of the energy they then sell to the end-users," said Georgi Slavov, analyst at financial group Marex.
"This means that the extortionate prices we saw in the last three-six months have not fully gone through the system yet," he told AFP.
Slavov added that "unless something bad happens again between now and January, we expect consumer prices -- including headline inflation -- to start falling in the first quarter of 2023".
- Plunging prices -
Unusually warm autumnal temperatures have reduced demand and allowed most European nations -- though not Britain -- to ramp up gas storage.
A particularly cold winter could quickly send demand soaring once more across Europe.
"Industry specialists are warning that, just because (market) prices have fallen back sharply, does not mean they won't rise back as fast if winter demand rises rapidly," said independent analyst Howard Wheeldon.
"This relates to demand and how Europe copes through the winter."
In March, soon after the start of Moscow's assault on Ukraine, Europe's benchmark Dutch TTF gas price jumped to a record 345 euros per megawatt hour.
UK gas futures hit an all-time peak at 800 pence per therm.
After falling back, the market briefly rebounded close to the same levels in the summer after Russia suspended gas supplies to Europe via the Nord Stream 1 pipeline.
However since August, TTF gas has shed about two-thirds of its value.
In trading on Wednesday, TTF prices stood at 116.25 euros and UK prices at 278.13 pence.
Domestic energy suppliers bet against volatile prices by hedging, or taking a defensive position on futures markets, but this means they cannot always benefit from short-term moves in spot, or current, prices.