ENERGY PRICES are still higher than 12 months ago, despite a recent fall in costs that was mainly attributable to oil slipping from recent highs, latest figures show.
The Bord Gáis energy index, based on the cost of the various fuels used in Ireland, shows that overall prices fell 5 per cent in June, due to a drop in oil and electricity prices.
However, at 132, the index’s 12-month rolling average was still 20 per cent higher than in June 2010, when it was 112.
Commenting on the June figures, Michael Kelleher, trading analyst at Bord Gáis Energy, said that while there was a fall last month costs were still higher than 12 months ago.
“A sharp sell-off in Brent crude oil was the result of an announcement by the International Energy Agency of its intentions to release 60 million barrels of oil from its stockpiles while the fall in electricity prices was linked to the drop in demand over the summer months,” he said.
“The strengthening of the euro versus the US dollar and sterling made oil, natural gas and coal relatively cheaper for Irish buyers,” Mr Kelleher added.
Oil was $117 a barrel at the end of May but topped $120 by the middle of the month. However, it began to ease when the agency announced it would release some of its reserves.
Disruption in supplies from Libya, an important producer country, particularly for the European market, prompted the agency’s action. Prices fell to as low as $103 before creeping back up to $112.
According to Mr Kelleher, a number of concerns in the market, including the possibility of an increased demand for natural gas in Germany and that the agency’s action is only a short-term solution to the problem of growing demand and falling capacity, indicate that the index will increase again in the fourth quarter.
