This study estimates the elasticity of gas consumption in Italy with respect to changes in wholesale prices on the TTF market driven by supply shocks, in the short and medium term. It highlights differences across sectors, particularly during the 2021-22 energy crisis. The analysis is based on monthly data on gas consumption at the provincial and sectoral levels.
In the short term, gas consumption in Italy is only weakly responsive to wholesale gas prices due to contractual and technological rigidities. In the medium term, elasticity increases but remains low: a doubling of gas prices driven by supply shocks reduces consumption by 13% over two years. Sectors with a higher gas intensity, such as the chemical industry, have a lower ability to adapt their production processes in the short term.
