Wholesale cost of electricity almost doubles in a year, CSO reports

Rising cost of fuels and electricity the primary driver of inflation, which in Ireland was running at 4.1% in September, compared to 3.8% across the eurozone

Wholesale electricity prices increased by 6.8% in September compared to August and by 92.8% compared to September last year. File picture

The wholesale cost of electricity has nearly doubled in the 12 months to September as the war in the Middle East continues to disrupt energy markets, leading costs to surge, new data from the Central Statistics Office (CSO) shows.

In September, wholesale electricity prices increased by 6.8% compared to August and by 92.8% compared to September last year. While wholesale electricity prices are surging again, they still remain 53% lower than their peak in August 2022.

The price index for all energy fuels in September rose by 10.9% month-on-month and was up by 47.6% year-on-year. Wholesale petrol and diesel prices were up 11.1% and 21.1% annually, while fuel oil was up 56.9% 

Energy costs have continued to rise over the course of October as well. According to the Dutch TTF natural gas futures, gas has been trading at close to €97 per megawatt hour — up from just under €73 per megawatt hour at the end of September and from the €31.70 recorded before the war broke out in late February.

The oil markets are experiencing similar levels of price surges. On Tuesday, Brent crude oil, a global benchmark for oil prices, was trading at about $114.80 (€103) a barrel. As of the end of September, it was priced at $98 a barrel.

The rising cost of fuels and electricity is the primary driver of inflation, which in Ireland was running at 4.1% in September. Across the eurozone, the inflation rate has been running at 3.8%.

The European Central Bank (ECB) has been steadily increasing interest rates to try and bring down inflation. The bank is due to kick off two days of meetings tomorrow, but another interest rate hike is not expected at this time.

However, another interest rate hike is expected before the end of the year, which could occur at the ECB’s next meeting in December.

In addition to the rising wholesale cost of electricity and various energy products, the CSO data shows producer prices for food products increased by 1.2% in the 12 months to September, while the food products, beverages and tobacco index was up by 1.1%.

Among the notable changes in wholesale prices was fish and fish products, up 9.6%, while prices for meat and meat products were down 9.4% year-on-year.

Domestic producer prices for manufactured goods were on average 2.4% higher year-on-year, while producer prices for exported goods were up by 8.1%. Overall, manufacturing producer prices were 7.4% higher in the year.

The largest price increase in this sector was seen in the category of chemicals and chemical products, which were up 16.5% compared to last year.

In the construction sector, wholesale prices for products were up 3.8% annually.

The building and construction index, which includes the cost of materials and wages, was up by 0.6% in the month and was 3.6% higher compared to September last year.