Electricity and gas prices ‘will come down’, Taoiseach says

Electricity and gas bills will fall, but at a slight delay to the reductions seen on wholesale markets where gas prices recently hit a two-year low, Taoiseach Leo Varadkar has said.

“There isn’t a direct link between wholesale prices and the retail prices that homeowners and businesses pay,” Mr Varadkar said when asked when bills would drop.

“When prices are going up in the wholesale markets, the full increase isn’t passed on, and when prices go down, the full reduction isn’t passed on, there’s a time lag.

“Prices will come down. Electricity and gas prices will come down. But if there was an exact link, they would have gone up a lot more than they have.”

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Irish inflation falls below ECB target rate of 2% for first time in nearly three years

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Last week the European benchmark Dutch wholesale natural gas price for the month of June fell to €24.90 per megawatt hour, the lowest level seen in two years.

[ Why are household gas bills stubbornly high as wholesale prices plunge? ]

Meanwhile, benchmark wholesale British gas prices, which affect electricity providers in Ireland, have almost halved since the beginning of the year.

The picture is a steep contrast to August 2022, when the Dutch benchmark peaked at about €340 per megawatt hour as Russia cut pipeline gas flows to Europe, before falling in the autumn.

Analysts credit the falling prices to a drop in demand due to a mild winter as well as policy efforts to reduce consumption, which have cut use significantly in several countries.

Meanwhile, storage facilities in Europe have remained high, while shipments of liquid natural gas continue to cross the Atlantic from the United States in record volumes, making for ample alternative supplies.

Energy market analysts have warned, however, that continental European countries will need to continue to keep their use of gas down in order to avoid winter shortages.