Soaring energy costs and why ‘we can’t protect everyone from the impact of war’
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Why are energy prices soaring and how will this affect Irish households?
Hello, I'm Kieran Hancock. Welcome to Inside Business. Later in the show, I'll be talking to Ben Calverly about the business of the British and Irish lines, which are based in Dublin. Ben is the CEO and he tells me about the future growth plans for both the men's and women's tours. But I'm starting with energy prices this week. Amid the ongoing conflict in the Middle East, fuel prices at the pumps continue to rise, and Energia last week became the latest domestic player to increase its electricity and gas prices. So a winter of discontent potentially lies ahead, with the government scrambling to put together support packages for the budget on October 6th. Myrn Lynch is senior research officer at the ESRI and an energy expert, and she joined me in studio to give me her view on the outlook for energy prices both over the short and long term.
I began by asking her about the current picture on energy prices and how this will feed into costs for Irish households and businesses. Here we go.
Yeah, so the long-run impact on prices since kind of Ukraine hasn't really gone away. So we had kind of the Ukraine war, obviously, that hit gas first, and then that led through to oil. And then obviously, as gas prices go, so electricity prices go. And we were kind of at the point where right before the invasion of Iran, um, the futures for electricity were almost back to where they were and and gas was kind of getting there as well. Pre
Ukraine levels.
Yeah, yeah. Um so now that still hadn't fed through to bills. This was just kind of what was happening on the futures markets and the wholesale markets. So I suppose if Iran hadn't happened, we might have, you know, potentially gone back to what one might call normal and then of course Iran happened. And then with Iran, things went the other way around in that oil prices went up first and that bled through to gas prices, and then again we see that lag from gas to electricity prices. Um and the oil prices respond immediately. So if the price of Brent goes up today the price of petrol and diesel goes up on the four quidts immediately the price of home is the same. We've seen that in the last few weeks. And we've seen in th in the last few weeks um we're seeing prices come back up to that magical two euro or even above that two euro a litre.
And that's even with the excise productions that the government we've had big cuts in excise over kind of twenty cent per litre, and we also had the deferral of the carbon tax. Those were due to be reversed from the first of September at about eight eight point five cent per liter. That's been delayed at least for September and October. Um and there was also the increase in carbon taxation, which was meant to come through. Which was delayed and and now there's of course we're in the run up to the budget, so talking about all of that again. But one of the more worrying things to say is if we look at kind of the futures markets. So forward markets and futures markets for oil and gas, they're not looking pretty right now.
So while nobody can predict the future, what we can say is no one is expecting this conflict and no one is expecting the impact on energy prices to ease off any time soon, unfortunately.
Yeah, okay. Energia became the latest of the big players to increase domestic energy prices last week by between five and ten percent. A bit more on the gas side, I think, than on the electricity side. And there they were following on from the likes of Electric Island, which is known by East B, Borgosh, and others who've increased their prices. So that's a very real hit to households now. And I I think um in terms of energia It's going to impact two hundred thousand customers. Um they'll take effect from october twelfth. Electricity price is going up by four point seven percent and nine point four percent on the gas side. They're saying that dual fuel customers will see their average annual bill rise by approximately two hundred and thirty uh euro, but it depends on how much you use and whether you're using both.
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Chapters
8 chapters
1
Why are energy prices soaring and how will this affect Irish households?
0:03–6:54
2
What is the outlook for electricity and gas prices over the next few months?
6:54–12:34
3
How can consumers lower their energy bills by switching providers?
12:34–19:43
4
Should the government regulate discount‑teaser rates for new energy customers?
19:43–25:47
5
What support is being considered for households that rely on home‑heating oil?
25:47–32:27
6
Why can’t we protect everyone from the impact of war on energy prices?
32:27–41:20
7
Should Ireland consider building a nuclear power plant?
41:20–49:43
8
What are the financial results and future growth plans for the British & Irish Lions?
49:43–56:15
Speakers
1 identifiedMore from Inside Business with Ciaran Hancock
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