A big chunk of inflation in Europe was caused by a surge in natural gas prices due to the Ukraine war and the blowing up of the Russian gas pipelines in August 2022.
Prior to this, most of the natural gas consumed in Europe was imported cheaply from Russia. After the pipelines got destroyed, much more expensive Liquefied Natural Gas (LNG) had to be shipped in from Qatar and the USA. Wholesale prices surged as panicking governments rushed to fill storage tanks ahead of Winter 2022, and speculators front-ran them.
Here's the chart:
The price has come down mainly due to reduced demand.
All businesses rushed to review their energy consumption, and all identified energy waste that they then reduced. Households too tried to help by turning down the thermostat.
It has helped that the winters of 2022 and 2023 have been extremely mild. This means that the gas storage units across the continent haven't been tapped and thus Europe has a surfeit of gas. So the price has now sunk.
