The Bord Gáis Energy Index, which tracks the prices of oil and electricity, as well as gas and coal, showed wholesale prices rose 6% in July and were 12% higher from a year earlier.
In the month, Irish electricity wholesale prices were up 8%, driven by the costs of imported gas used to fuel power plants, while oil prices were up 10% in dollar terms, the first increase this year.
However, the currency effects of a much stronger euro, as well as other factors such as forward-buying undertaken by energy firms, mean the increase in the index will not necessarily lead to higher retail energy bills anytime soon.
Recent CSO figures showed the prices that consumers paid for housing, electricity, and gas in July rose 0.2% in the month and were up 2.1% from a year earlier to stand at December 2016 levels.
Much depends on the euro’s value against the dollar and sterling, while rising oil prices may spur US shale producers to pump more and therefore restrict further potential increases, despite the best efforts of the Opec oil-producing nations to cap supply.
At the end of July, the price of a barrel of Brent crude oil, a global benchmark, was at $52.65, representing a 6% rise in the month in euro terms. Brent has since fallen, and was trading yesterday at $51.73 a barrel.
Other elements feed into electricity prices such as the amount provided to the grid by wind, which can vary sharply between the seasons.
In July, the proportion of demand met by wind was just over 12%, according to Bord Gáis Energy.
“It is interesting to see the index rise for the first time this year, as well as seeing oil make its first monthly gain in the same period,” said Bord Gáis Energy trader Darragh Crowley.
“Even more interestingly, these gains were offset in Europe by a strengthening euro — implying that the fluctuating currency markets are having an increasing influence on global and European energy prices.”
In the month, the euro rose 3.5% against the dollar, and increased 2% against sterling, to 89.5p. Against sterling, the euro has risen as much as 18% since just before the UK voted last summer to leave the EU, and has risen further this month to trade yesterday at around 90.8p.
It has risen 12% since the start of the year.
Bord Gáis said the price of coal reversed earlier falls to increase again last month. It increased 5% in the month to $83.25 a tonne in dollar terms, but posted only an 1.8% increase in real terms when the surge in the value of the euro is taken into account.
The traders noted that due to the policies of China coal prices have climbed 90% from the start of 2016.
As the world’s largest consumer of coal, its imports have surged by 24% “as Beijing continues to curtail domestic output by restricting production and closing inefficient mines”, said Bord Gáis.
Gas prices last month were affected by outages in Norway. And “the UK continues to export significant gas to the continent, via the UK-Belgium interconnector”, it said.