Energy wholesale prices jump 50% over the past year

Wholesale energy prices are almost 50 per cent higher than 12 months ago, according to latest Bord Gáis Energy Index.

Oil prices rallied 7 per cent last month, settling at $82.72 a barrel at the end of September. That represents a year-on-year increase of 46 per cent.

Gas prices increased 18 per cent last month and 57 per cent over the last year, as maintenance to key Norwegian fields continued to impact flows into the UK.

Coal prices also had a volatile month, settling 2 per cent above the August close and 11 per cent higher than last year while electricity prices also rose by 12 per cent.

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Bord Gáis Energy tader David Grainger said energy prices remain "well above the levels seen at this time last year". He said "heightened concerns ahead of impending US sanctions on Iran was a key driver of oil price during the month while reduced Norwegian supplies pushed up gas prices".

With oil prices a key component of the energy index, gains this month along with the break out to fresh four-year highs could set the tone for energy prices over the next 12 months.

Fears of a cold winter and low storage have pushed gas prices higher in Europe leaving more scope for coal prices to increase, as utilities prepare to burn coal if gas shortages are not alleviated.

Wholesale electricity prices typically track the cost of imported gas as it is the most significant cost in the production of electricity. However, this can vary on a month-to-month basis.