SHARP OIL and gas price increases could send the Irish economy plummeting by as much as 7.5 per cent over the next 10 to 15 years, a report claims.

The study, sponsored by multi-national, Siemens, says that Irish gross domestic product (GDP) could fall by between 3 per cent and 7.5 per cent between now and 2025 in certain scenarios between now and 2025 that involve either sudden or sustained increases in oil and gas prices.

Siemens, one of the main suppliers of turbines to wind farms in this country, says that exploiting Ireland’s renewable energy resources, including wind power, would help ease – but not eliminate – the economic impact of such price rises.

Its findings are not based on predictions, but on a number of possible scenarios. One envisages a rapid rise in oil and gas prices to more than $200 a barrel, from next year to 2020. This could force a 7.5 per cent fall in GDP.

In a second situation, prices remain below $100 a barrel for a sustained period of time, and then jump to $150 and fluctuate from this point. This could shrink the economy by as much as 3.5 per cent by 2025, the report says.

A third possibility is that, over the next decade, prices could rise sharply to around $175 a barrel fall back and rise steeply again. Such a scenario could cut GDP by 3.5 per cent.