Summary
Europe goes into winter short of gas. EU storage was 70.9% full on 26 September, against a five-year average of about 87% for early October. The October TTF futures contract reached €82.52 per MWh on 14 September. As a monthly average, gas cost €53.97 per MWh in July, 59% more than the €33.95 of July 2025. This briefing follows last week's report on oil and diesel and looks at how gas reaches the products you buy: through factory energy, electricity, fertiliser and packaging.
Higher gas prices are a reason to check supplier claims closely, especially for energy-heavy products. They are not a reason for blanket price rises. Pay only for the proven energy cost that is linked to gas and was not bought in advance, through a two-way index clause with set review dates.
Data as of 2 October 2026, except the storage projection (4 October). The latest confirmed gas futures price is from 14 September and the country storage figures are from 26 September, so check current prices before a negotiation.
Why gas is expensive
The TTF front-month price stayed above €50 per MWh from mid-July, passed €60 in late July and went above €80 in September for the first time since early 2023. As a monthly average, TTF gas cost €53.97 per MWh in July 2026, against €33.95 in July 2025, a rise of 59%. These are World Bank monthly averages ($18.06 and $11.62 per mmbtu), converted at the ECB's monthly euro-dollar rates.
Before the war, almost 20% of global LNG supply passed through the Strait of Hormuz, which has been effectively closed since the end of February (IEA). The IEA forecasts that combined LNG supply from Qatar and the UAE will fall by about 45% (54–55 bcm) over 2026 as a whole. That forecast assumes the Strait reopens in the third quarter and Gulf output is back to normal by the start of the fourth; with Hormuz still restricted, the loss could be larger. Norwegian maintenance, Asian buyers competing for cargoes and a hot summer also slowed storage refilling. Short-term Russian LNG imports have been banned in the EU since 25 April (IEA), and the remaining long-term contracts are due to end on 1 January 2027 (IndexBox).
Germany (57.0%) and the Netherlands (56.5%) are furthest behind on storage. France is at 81.4% and Italy at 86.2% (GIE AGSI via Global Energy Flow, 26 September). EU rules let countries reach their 90% target at any point between 1 October and 1 December, and the target can drop to 80% if supply is difficult. The Netherlands has lowered its own target from 74% to 64%.
EU storage reached 72.67% on 4 October. Global Energy Flow calculates that at the average injection rate of the previous eight days (+0.225 percentage points a day) the EU would be about 79.0% full on 1 November, and about 78.6% at the 22-day rate (+0.21). If injections slow to +0.15 points a day, our own downside case, it would be about 76.9%.
Forecasts for the winter are on different bases and spread widely. Oxford Economics expects close to €60 per MWh on average for Q4 2026 to Q1 2027 (Euronews, 20 August). Morgan Stanley expects a winter average of €85, and over €100 if the winter is cold (IndexBox, 20 September). ECB staff assume annual averages of €51.0 for 2026 and €43.3 for 2027. All of them expect gas to be cheaper in 2027.
For buyers: a supplier who prices the next 12 months on today's futures price is charging you for the peak. Keep agreements short, or use a two-way gas index with a cap, a floor and review dates.
Factory energy
Food factories burn gas to make steam and to run ovens and dryers. They use it for cooking, pasteurising, sterilising, baking, frying, spray-drying milk powder, drying pet food and refining sugar. Gas also often sets the wholesale electricity price, though how much depends on each country's power mix and on the supplier's own power contract. ECB staff assume wholesale electricity will average €108.7 per MWh in 2026 and €90.2 in 2027. LNG contracts indexed to oil follow oil prices with a typical lag of five to six months, so their impact grows in the second half of 2026 (IEA).
Shelf prices for processed food have barely moved. Euro-area prices for processed food, alcohol and tobacco rose 0.4% over the year to September, after 0.5% in August (Eurostat flash estimate, 2 October). Consumer energy inflation was 18.8%, up from 14.3%, and headline inflation 3.8%, up from 3.2%. The energy figure tracks household bills. It shows the direction of travel, but it does not measure a supplier's industrial energy cost.
Energy is a small part of what most food products cost to make. A 59% rise in the monthly average gas price (July 2026 against July 2025) does not justify a 6–8% product price increase.
For buyers: pay only for the energy cost that is actually exposed to gas, and ask for the evidence listed below.
Fertiliser, grain and feed
Natural gas typically accounts for 70–80% of the operating costs of producing ammonia and urea (IEA). Urea averaged $726 per tonne in March, $857 in April and $770 in May, roughly double its late-2025 level, then fell to $453 in June and $400 in July (World Bank monthly averages). On 2 September AGF Nitrogen, the Agrofert group's fertiliser business with 3.6 million tonnes of ammonia capacity a year, said it was considering cuts at its ammonia plants. Its CEO blamed the rising cost of gas and high prices for emissions allowances. TTF gas was at €73.15 per MWh that day (Profercy).
Farmers pay for fertiliser before they plant. Higher fertiliser costs will show up in grain, oilseed and animal feed prices with the 2027 harvest, and are not in current contracts. The link is clear; how much and when it reaches food prices is not.
For buyers: don't accept fertiliser-based increases on this season's grain-based products without evidence that the supplier's own input costs have risen. Review bakery, cereals and pet food in spring 2027.
Glass packaging and CO2
Glass furnaces run on gas, so glass makers are exposed to the current gas price. How much depends on each producer's energy contracts and hedging, and there is no current price index for glass that would show it.
Carbon is a separate cost. In February the European container glass association FEVE, which represents more than 140 plants, warned that carbon costs could double for some producers between 2025 and 2026 (Vinetur). That warning is about the cost of emissions, not the price of gas, so it is not evidence for a gas-driven increase on glass packs.
The CO2 used in soft drinks, beer and meat packs mostly comes from fertiliser plants, so when those plants cut output CO2 can run short, as it did in 2022. There is no current price index for CO2 either, so this part rests on industry statements and press reports.
For buyers: ask glass suppliers to show gas and carbon costs separately, and treat CO2 mainly as a supply risk. Ask about backup CO2 sources and approve alternative packs in advance. A possible shortage is not a reason to pay a premium now.
Which categories are most exposed
The most exposed products are milk powder, cheese, dry and wet pet food, bakery, sugar, frozen ready meals and anything in glass. Gas runs the spray dryers, kibble dryers, sterilisers, ovens, sugar boilers, freezers and glass furnaces behind them. Energy claims here can be valid. Require evidence of the gas-linked share that was not bought in advance before agreeing to any increase.
Snacks, canned goods, drinks, packed meat and poultry, and paper and board packaging are in the middle, through frying, can sterilising, CO2 supply and paper drying. Challenge the size of these claims, and ask for a cost breakdown and a backup plan.
Fresh produce (except greenhouse-grown), repacking and products that need little cooking use little process heat. Challenge energy claims on them, and require a full cost breakdown before considering any.
This grouping is our own assessment of how much gas each production process uses. Confirm it with each supplier's cost breakdown.
How to check a supplier's energy claim
Ask every supplier for:
- energy as a percentage of product cost
- the split between gas, electricity and other energy
- the share bought in advance, and when those contracts expire
- the production site and which energy market it buys in
- energy used per tonne or per unit
- glass and CO2 exposure, where relevant
If you agree to an index clause, it needs a named gas index and start date, a verified exposure percentage, a cap and a floor, fixed review dates with an agreed time lag, and automatic price cuts when gas falls as well as rises.
To size a claim, apply the gas price change only to the part of the cost that is exposed to it:
supported increase = unit cost × energy share × gas-linked share × share not bought in advance × change in the gas index
Two examples, with illustrative figures and the +59% gas change from July 2025 to July 2026:
- A supplier with a low energy share asks for +7% on a product with a unit cost of €1.00. Energy is 5% of that cost (€0.050), 70% of the energy is linked to gas (€0.035), and half of that was not bought in advance (€0.0175). €0.0175 × 59% = €0.0103, so the supported increase is about 1%.
- A milk powder supplier, where spray drying makes energy a much bigger share of cost, asks for the same +7%. Energy is 15% of a €1.00 unit cost (€0.150), 90% of it is gas (€0.135), and half was not bought in advance (€0.0675). €0.0675 × 59% = €0.0398, so the supported increase is about 4%.
The real shares must come from the supplier, and for a real case you should use the change in a named index over the period the new price will apply. Our diesel surcharge guide uses the same approach for freight.
What buyers should do now
- Don't fix 12-month prices at the winter peak. Keep agreements short or index-linked.
- Ask suppliers how much of their winter energy they have already bought, and second-source energy-heavy products where you can.
- Don't accept fertiliser-driven increases this season without evidence, and track the AGF Nitrogen decision and urea prices for 2027 grain and feed costs.
- Line up backup suppliers and alternative packs for CO2 and glass, with a review point in Q1 2027.
- Check the current TTF price before each negotiation. The latest confirmed futures price in this briefing is from 14 September.
Note on the PDF: the PDF version compares July 2026 gas prices with the July–September 2025 average ($11.29 per mmbtu) and gives a 60% rise. Against July 2025 the rise is 59%, which leaves the worked example unchanged. The PDF's 45% fall in Qatar and UAE LNG is the IEA's forecast for 2026 as a whole, and its 77–78% storage estimate for 1 November is replaced here by the Global Energy Flow projection. The figures in this article are the corrected ones.
Sources: IEA Gas Market Report Q3 2026; World Bank Pink Sheet and monthly commodity price data (gas and urea monthly averages); ECB euro reference exchange rates (monthly averages, for the €/MWh conversion); Eurostat HICP flash estimate (2 Oct 2026); ECB staff projections (Sep 2026); GIE AGSI+ via Global Energy Flow (26 Sep, and storage projection 4 Oct); IndexBox (20 Sep); LNG Global (11 Sep); Euronews / Oxford Economics (20 Aug); Profercy (2 Sep); FEVE via Vinetur (12 Feb); Brussels Times (2022 CO2 shortage). Data to 2 October 2026. Winter forecasts are those of the named banks and consultancies as quoted in the press, not RedWildPig forecasts. Consumer inflation figures do not measure supplier costs.