Wholesale gas tumbles to €30 ratcheting up pressure on Irish suppliers to cut bills

The €30 per megawatt per hour price reached late on Thursday evening compares with the record price of over €300 hit in July last year

The mild European winter meant there was little disruption for major industrial users of gas such as Germany for its major car and chemicals industries. 

The price of European wholesale gas slumped below €30 for the first time since June two years ago, in a stark reversal of last year’s market record prices that led to huge spikes in household and business electricity and heating bills. 

The sharp falls, which have accelerated in the past two weeks, will put further pressure on Irish power generators and suppliers to quickly pass on the reduction in their wholesale costs to their household and business customers. 

The Irish regulator, the Commission for Regulation of Utilities, CEU, said earlier this month that at that stage it had seen no evidence that energy companies were failing to pass on dramatic declines in wholesale gas prices to users.

The latest sharp falls came as Europe built up substantial reserves of gas in storage in response to it ending its dependence on relatively cheap Russian supplies for its industry and households.

Ireland is not directly connected to the continental gas network but the prices paid on European wholesale markets nonetheless determine the wholesale prices paid by Irish-based power generators and suppliers. The generators and suppliers here will face even more scrutiny in the coming weeks when retail prices should start to reflect the hefty falls in wholesale prices. 

The price of wholesale gas was hovering around €30 per megawatt per hour late on Thursday evening. That compares with the record price of over €300 hit in July last year amid fears that the lights would go out due to major shortages and electricity would need to be the rationed during the winter months. 

As it turned out, helped by a mild European winter, there was little disruption for major industrial users of gas such as Germany for its major car and chemicals industries. 

The price of European gas for delivery over the summer months fell by 5% in Thursday's trade, and was 23% lower than at the start of April. The price of European wholesale gas for delivery in December also fell on Thursday, but there remains a hefty premium of around €20 per megawatt per hour above the July price. 

Prices on UK wholesale gas markets also fell by around 5% on Thursday. The European Union is seeking to reform the European wholesale gas market amid widespread concerns about the price spikes last summer.