Households could face higher electricity bills from next month as the crisis in the Middle East continues, energy industry sources predict.
Irish families pay €1,700 a year on average for electricity, a report from the Economic and Social Research Institute confirmed this week.
But senior industry figures believe they could start paying more in the coming weeks as the fallout from the US-Iran conflict continues to roil global energy markets.
“Really you are looking at May or June for increases in retail electricity prices,” one executive said. “It’s something we’re monitoring on a daily basis.”
Electricity prices are closely tied to natural gas, which is used to generate about half the power used in the Republic.
Natural gas prices almost doubled in March as Iranian retaliation for US-Israeli attacks halted production in Qatar and shut the Strait of Hormuz, a vital oil and gas shipping lane.
It comes as the head of the world’s energy watchdog on Thursday warned that Europe only has six weeks’ supply of jet fuel because of the conflict.
Fatih Birol, executive director of the International Energy Agency, warned there could be flight cancellations “soon” if oil supplies remain restricted by the Iran war. He said Asian countries such as Japan, India and China that rely on energy from the Middle East are on “the front line”, but pressure will then “come to Europe and the Americas”.
Irish industry sources did not say by how much they expected electricity prices here to increase.
However, they stressed that the price shock that followed the outbreak of the US-Israel-Iran conflict was not as severe as the market reaction to Russia’s invasion of Ukraine in 2022.
“I would say we’re going to see some increases this time,” said one insider.
“But hopefully they will be nothing like what we saw after Ukraine, and hopefully they will be reasonably moderate.”
Nevertheless, energy businesses here expect gas prices to remain high even if the US and Iran agree a peace deal quickly.
Iranian attacks halted and damaged liquefied natural gas producer QatarEnergy’s facilities. Repairing this and restoring output to pre-war levels could take months, sources estimate.
Key natural gas prices rose 90 per cent last month on London’s Intercontinental Exchange, where much of the fuel is traded.
On average, electricity companies looking to buy gas up to 12 months in advance, paid 147p a therm – the unit in which it is sold – in March. In December the equivalent price was 77p.
Electricity suppliers buy power months and even years in advance, a practice known as hedging, which insulates customers against price volatility, said Dara Lynott, chief executive of the Electricity Association of Ireland.
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He said companies will decide on their own prices and responses to the crisis.
News of likely electricity price increases comes days after the Government agreed the second of two deals on easing motor fuel hikes likely to cost it €505 million following protests and blockades last week.