Wholesale gas prices spike by 15% on Monday fuelling fears for business and households
Gas On Continent The For Prices And Pa Picture: Influence Irish Prices The Gas British Strongly
Wholesale gas prices in Europe spiked 15% higher to hit new record levels, fuelling new fears for business and household power bills this autumn.
The increase in continental gas prices was among one of the sharpest in any one day since the invasion of Ukraine on February 24, and came following renewed fears about the security of gas supplies from Russia to the European Union.
Both the euro and sterling slumped against the dollar, as worries grow that energy costs will lead to an industry-led recession across the continent. The euro fell below parity at 99.8 US cent.
Monday's spike in gas prices does not automatically mean the bills for Irish businesses and households will leap by a further 15%, experts say.
However, gas is used by power stations from Cork to Antrim to generate a large part of the power on the All-Ireland grid, and the leap in wholesale prices had in recent months already fed into higher electricity prices across the board.
On futures markets, European wholesale gas prices for delivery in September to customers, such as power stations and large energy-hungry manufacturers like cement makers, reached as high as €295 per megawatt hour, before settling at €280 per MW hour at the close of trading.
Traders saw little respite from the risk of Russia turning down the gas or cutting it off completely, with prices in December trading at an elevated level of €290 per MW hour.
Even before Monday's price hikes, wholesale gas prices had leapt 11-fold. Rocketing energy costs have been passed onto consumers and helped to drive consumer price inflation to levels not seen for 30 and 40 years in many European countries.
Ireland has access to the Corrib field off the Mayo coast for about a quarter of its annual gas needs, and gets most of the rest from the North Sea.
Wind farms also account for a significant part of overall electricity consumption, but mostly in the late winter months when the Atlantic storms blow.
Gas prices are traded as a European and global product, and prices on the continent strongly influence prices for Irish and British gas too.
“The catastrophe is already there,” Thierry Bros, a professor in international energy at Sciences Po in Paris, said.
In one of the most dire warnings yet, Belgian Prime Minister Alexander De Croo said Europe could face up to 10 difficult winters.