Lower oil prices fail to halt rising energy costs in April

Lower oil prices failed to halt rising energy costs in the Republic last month, the latest figures show. Oil prices slipped 2 per cent in April on the back of International Energy Agency figures showing an increase in supply and some easing in tensions between the west and Iran.

The Bord Gáis Energy Index, which tracks the total cost of energy in the Republic from month to month, stood at 154 at the end of April. This means, at that point, overall energy costs were 6 per cent higher than at the end the last quarter, and 4 per cent higher than at the end of April 2011.

Oil prices, which have a big influence on overall energy costs, fell 2 per cent in euro terms during the month, the first drop since September last year. However, natural gas prices rose 6 per cent thanks to constraints on supply in Britain, a key supplier to the Republic, and increased demand which resulted from cold weather.

This had a knock-on impact on electricity. Natural gas is used to generate more than 60 per cent of the electricity used in the Republic. Electricity costs rose 3 per cent during April.

Bord Gáis power trader John Heffernan blamed the increased wholesale cost of gas in Britain, and said that the intermittent nature of wind-generated power also helped nudge prices higher.

Coal prices fell 7 per cent as demand across Europe dropped. The big consumers of imported coal, Britain and Germany, had sufficient stocks, while slower industrial activity meant weaker than usual demand.