Wholesale electricity prices fall by over 25% in April

The price of electricity for factories in April 2022 was still 155.5% higher than in the same month last year
Wholesale electricity prices fall by over 25% in April

The fall in wholesale electricity prices last month comes as natural gas prices in Europe declined due to rising stockpiles and stable Russian supplies countered some risk on Moscow’s new payment rules.

The price of wholesale electricity for manufacturers and businesses has fallen by 25.6%, new figures from the Central Statistics Office (CSO) show.

However, despite the fall, the price of electricity for factories in April was still 155.5% higher than in April 2022.

Similar figures were revealed by the CSO's overall energy products index, which showed a decrease of 22.7% from March and an increase of 125.5% when compared to April last year.

There was also a fall in the price of gas oil other than diesel, which declined by 3.2% in comparison to March. Petrol prices also fell slightly when compared with March but were still more than 15% above the April 2021 prices.

According to the CSO, monthly factory gate prices increased by 1.2% in April. This compares to an increase of 0.4% for April of last year.

The decrease in wholesale electricity prices last month comes as natural gas prices in Europe declined due to rising stockpiles and stable Russian supplies countered some risk on Moscow’s new payment rules.

Benchmark front-month Dutch futures are headed for a weekly loss of about 7%, after closing on Thursday at the lowest level since Feb. 23, the day before Russia invaded Ukraine.

Europe’s gas inventories are rebounding to near seasonal levels as companies prepare for any potential disruption from the continent’s top supplier. Russian gas shipments to Europe on Friday are expected to be stable.

The European Union wants to keep stockpiles high to guarantee the continent’s energy security, given the risk of curtailments amid the war. Lawmakers and nations reached a deal on Thursday to set a minimum inventory threshold of 80% before Nov. 1, with that level rising for subsequent winters.

European storage levels have jumped 24% this month and are close to the 45% five-year average, according to Gas Infrastructure Europe.

Some manufacturers are facing rising costs of other inputs, such as materials. The wholesale price index figures released today show that structural steel and reinforcing metal have increased in price by 20.5% in April, compared to March.

Manufacturers have struggled in recent months as supply chain issues due to the pandemic have been exacerbated by Russia's invasion of Ukraine and renewed lockdowns in major Chinese cities as well as high levels of inflation.

Additional reporting from Bloomberg

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