Wholesale gas prices jump 21%, raising further fears for Irish household heating and lighting bills

Along with the cost of housing, escalating bills for heating and lighting homes this winter have pushed the Irish consumer price index to 5.3% in November. File Picture: PA

Wholesale gas prices continued to flash red on Tuesday, raising fears that Irish household heating and lighting bills will increase deep into the winter.

The price of gas traded on the Dutch futures market - a key European hub that determines the price electricity generators in Ireland and across most of the rest of Europe will pay for their supplies - shot up by a further 21% in the latest session.

At 4pm, prices reached almost €178 per kilowatt per hour for delivery in January and February, while gas for delivery as late as June was trading at €117 per kilowatt - at a time when prices should be falling sharply with the start of summer.

That signals there will likely be no summer pay back for Irish households on their heating and lighting bills. 

Along with the cost of housing, escalating bills for heating and lighting homes this winter have pushed the Irish consumer price index to 5.3% in November.

Consumer prices in many northern European countries, that like Ireland rely for the most part on gas supplies from Russia and do not have access to hydro or renewable sources to generate electricity, have also raced upwards.

 Inflation in Germany and Britain have risen at similar rates as that in Ireland.

Europe has faced an energy supply crunch this winter as economies recovered from the first waves of the Covid pandemic and because the wind failed to blow last year as strongly as normal. 

Abnormal levels of rainfall in Scandinavia used to power hydropower plants added to the shortages.

More recently, energy traders have watched with alarm the growing tensions between Russia, Europe and the US involving Ukraine. Daily deliveries of gas to western Europe by Russia's Gazprom at various pipeline metering points are watched closely.

The shortages of energy have led to a huge demand for gas to generate electricity by gas-powered plants. The higher wholesale prices are fairly quickly passed onto households in the form of increased household bills.

There has been better news for Irish motorists with the fall in the global price of crude. 

Sustained falls in the global crude take about two weeks to be passed down the line to petrol forecourts. The price of Brent crude traded at $72.50 a barrel, up by $1 in the session, but down sharply from over €90 a barrel just a few weeks ago.