Household bills don't reflect gas price drop
WHOLESALE gas prices have fallen by 18pc in the last year but households are only set to get a fraction of that reduction in their energy bills.
The Dáil transport committee heard yesterday how consumers are still not getting the full benefit of falling world gas prices.
International gas prices in euros have declined by 18pc between early 2014 and 2015, the Commission for Energy Regulation (CER) said.
Meanwhile, Irish household electricity prices have fallen or are set to fall by between 2pc and 4pc, though some of these reductions won't come in until April, said CER director of energy markets Laura Brien. Domestic gas prices are due to fall by between 3.5pc and 4pc at Bord Gais and Airtricity.
Customers were not getting the full benefit of world reductions in gas prices because energy companies buy ahead or "hedge" their supplies at fixed prices. "It tends to take six months for price changes to feed through to the retail market," said Ms Brien, noting that energy competition was strong here, with a switching rate of 15-16pc, well above most other countries.
CER said that around half the retail price of gas is accounted for by wholesale gas prices with most of the rest made up by fixed network costs such as pipelines which do not vary much. World gas prices account for about 30pc of the final price of electricity. Though world oil prices have fallen by 50pc, this does not have an impact on the price of electricity as oil only accounts for 1pc of power generation.