LONDON — Europe is facing continued volatility in its wholesale gas markets, prompting concerns across the region that an energy crisis could be about to get even worse.

The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, was around 5% higher by 1 p.m. London time on Wednesday, with the price reaching 93.3 euros per megawatt-hour. Contracts for March and April delivery were also up by 5% on Wednesday, according to New York’s Intercontinental Exchange.

Meanwhile, the European day-ahead price increased to 94 euros per megawatt-hour, according to data from Reuters. While a far cry from the peak of around 182.3 euros seen in December, Wednesday’s activity still marked a significant price rise from the end of 2021, when prices dipped below 70 euros per megawatt-hour.

Wednesday also saw German day-ahead baseload power prices gain more than 50%, while their French equivalents increased 17% during early trade, according to Reuters.

It comes after European benchmark gas prices surged 30% on Tuesday, amid concerns about a cold winter, low gas inventories and Russia constricting supply to Europe.

Over the course of 2021, European wholesale gas prices rose by more than 400%, setting new records.

Ole Hansen, head of commodity strategy at Saxo Bank, told CNBC in an email that gas prices in the EU and the U.K. remained at the mercy of the weather, the pace of shipments, and Russia.

“Into January, the price of gas has resumed its ascent, again with the prospect of colder weather driving increased demand for heating and very, very low supplies from Russia, especially via two important pipelines through Poland and Ukraine,” Hansen added. “Whether Russia is deliberately keeping supplies down due to Nord Stream 2 pipeline approval delays and the Ukraine border crisis is difficult to say. But it highlights failed energy and storage policies in Europe and the U.K., which has left the region very dependent on imports of gas, especially given the still unreliable level of power generation from renewable sources.”

Front-month natural gas contracts in the U.K. were up almost 6% on Wednesday, with contracts for April delivery gaining more than 7%.

Meanwhile, day-ahead prices at the National Balancing Point, the U.K.’s benchmark for natural gas trading, rose more than 10% to around £2.25 per therm.   

The U.K. is particularly reliant on natural gas as an energy source, with more than 22 million households connected to the country’s gas grid. Britain’s largest single source of gas is the U.K. Continental Shelf, which made up around 48% of total supply in 2020. However, the UCS is a mature source, meaning it has to be supplemented with gas imported from international markets.

The U.K. has limits on how much suppliers are able to charge consumers for energy, with price caps reviewed by the government every six months. The next review is due in February.

Speaking at a press conference on Tuesday, Prime Minister Boris Johnson said the government was “not ruling out” measures such as tax cuts to keep energy prices stable, although he questioned the efficacy of such a move.

Trade body Energy U.K. told the BBC in December that it expected energy bills in the country to rise by up to 50% in the spring. The soaring cost of wholesale gas led to the collapse of a number of British energy suppliers last year.

Several U.K.-based small and medium sized businesses told CNBC on Wednesday that higher energy bills would deal a fresh blow to their already struggling companies.

“I am genuinely terrified about rising energy costs,” Gillian Ferguson, owner of Twisted Empire Bakes, said in an email. “My provider collapsed recently and [our new provider] has suggested we increase our monthly payment by £90 ($122). I’m a wholesale baker working from home with several ovens on the go — I’m not sure how long I will be able to keep swallowing the increases.”

Meanwhile, Craig Bunting, co-founder of independent coffee chain Bear, said energy providers had refused to renew his energy contract because his business is in the pandemic-ravaged hospitality sector, leaving him paying “a stupid amount for electricity.”

Lucinda O’Reilly, director of The International Trade Consultancy, told CNBC: “The rate at which energy prices are rising is going to have a disastrous impact on British manufacturers, who already pay much higher prices than competitors in Europe and the rest of the world.”

“The squeeze on small businesses is already frightening, with many of us putting a stop to investments while a majority of suppliers are sending weekly price increase e-mails,” added Adam Bamford, CEO of Colleague Box. “This could well be the straw that breaks the backs of a number of us.”