March 2020 saw a significant fall in wholesale energy prices, with some markets experiencing a decrease of over 50 percent. However, that does not mean that consumers are likely to see a relief in their bills anytime soon. This article explores why wholesale prices have dropped so drastically, the potential reasons why the savings may not be passed on to consumers, and what customers can do to protect themselves from high energy bills.
According to the Central Statistics Office, wholesale electricity prices decreased by 50.5% in the year ending March. The wholesale prices paid by utilities to electricity generators also fell 8.7% from February to March. However, wholesale prices for manufacturers and wholesale outlets increased by 0.5% in March, with food prices showing a slight decline. Despite the reduction in wholesale prices, consumers are still paying more than last year for energy and food. The consumer price for electricity rose 62.7% in the year to March. Wholesale energy prices account for over 50% of expenses incurred by households and businesses in Ireland. Price comparison site Bonkers.ie’s Daragh Cassidy noted that while wholesale prices have fallen, they remain higher than they were before Russia went to war with Ukraine in February 2022. As a result, it may take time for consumer energy bills to reflect a decline. The Central Statistics Office data shows that gases remain the primary fuel used by Ireland to generate electricity and the high energy cost still influences the manufacturing industry. While wholesale prices for construction products experienced a small decline in March, they rose 13.5% in the year. Glass, ceramics, cement, concrete, and stone increased by nearly 18%. Drink manufactures such as Whiskey have reported experiencing shortages and high costs of glass bottles, in addition to high energy prices.
In conclusion, the drop in wholesale energy prices in March may have been significant, but unfortunately, it has not led to any relief for consumers. With the ongoing economic uncertainties caused by the COVID-19 pandemic, it is more important than ever for households to manage their energy bills wisely. As we move forward, we must keep an eye on the energy market trends and explore alternative options to ensure fair and affordable energy prices for all.
