Natural gas prices have tumbled to a five-year low this month, helping to drive down costs for many businesses.

A report published today shows that December Irish wholesale gas prices are 26 per cent lower than 12 months ago and have hit lows not seen since 2010.

The average day-ahead wholesale price for gas is 1.71 cent a kilowatt hour – the unit in which the cost is measured – compared with 2.31 cent a kilowatt hour in December 2014.

The fall should help cut costs for Irish industries that purchase natural gas on the wholesale market.

According to independent supplier Vayu's Wholesale Market Report, the euro's fall against sterling this year has masked an even sharper price fall. The Republic buys its gas from Britain. Prices there are actually 33 per cent down in sterling terms.

However, Vayu’s figures show that wholesale prices are 35 per cent lower than the average price recorded for December over the previous three years, 2012 to 2014.

The company's senior energy analyst Joanne Daly said that weak demand and strong supply were driving prices down.

“Mild weather conditions have been a major factor, with temperatures significantly above seasonal norms during the month and it is expected to remain mild at least up until Christmas Eve, further driving down demand for gas.”

Ms Daly also said that wind energy is expected to be high over this period, cutting the need for gas to generate electricity.