Irish wholesale gas prices down by 41% in March

Irish wholesale gas prices are 41 per cent lower on average so far in March compared with March 2015, according to the latest Wholesale Energy Market Report published by Vayu Energy.

The report also showed prices were down 38 per cent year on year for the first quarter. While prices are unchanged compared with February, they remain at lows not seen since April 2010.

Vayu energy, which supplies gas to over 20 per cent of Ireland’s industrial and commercial market, said the collapse in prices is due to “an abundant supply of gas” in Europe and a significant strengthening in the value of the euro over the last year.

“The average day-ahead price for gas – the contract for gas delivery for tomorrow – is 1.31 c/kWh (cents per kilowatt hour) so far in March,” it said. “This compares with an average price of 2.23 c/kWh in March 2015.

“Irish wholesale gas prices have now over halved in euro terms (down 51 per cent) compared with the average monthly price recorded for March over the previous three years (2013-2015).

“This has had a significant impact on the energy costs of many Irish businesses purchasing gas on the wholesale market, particularly for users in the industrial and commercial segment.”

Joanne Daly, a senior energy analyst at the company, said unrest in Turkey and Iraq has created price volatility on the Brent crude oil market in recent weeks.

“Oil prices are likely to continue to influence longer term gas contracts, with the market awaiting the outcome of a meeting between OPEC and major non-OPEC members scheduled to take place on April 17th,” she said.

“A decision to freeze production could provide significant upward support to the oil market which in turn could result in higher wholesale prices for gas contracts.”