Eastern European energy conflict continues despite EU agreements.
The ongoing Russia-Ukraine conflict, leads to concerns that UK prices won’t come down as promised.
Russian energy giant Gazprom has stated that despite the EU deal signed by both Russia and Ukraine, it will not resume gas supplies to Europe until they receive a copy of the agreement. This is just the latest delay in a lengthy dispute between the two nations, which is affecting millions of people across more than 15 countries in eastern and southern Europe.
Russia supplies a quarter of Europe’s gas requirement, and 80% of this supply is transited through Ukraine. Gas supply is expected to resume soon, but it is estimated it will take 30 hours for the gas to reach Ukraine and a further 36 hours to reach the first EU countries, such as Slovakia, who today claimed to have only 11 days of reserve gas left.
The EU has accused the two countries of making Europeans hostages in their dispute, warning Moscow it risks losing its reputation as a reliable supplier and Kiev its status as an EU partner
Due to the significant drops in price of wholesale oil over the last year, led by a reduced world demand and the global recession, UK energy companies had committed to cut gas bills early this year.
The crisis raised fears, however, that they would use the Russia-Ukraine gas row as an excuse to delay passing on benefits of otherwise lower world energy prices.
Industry experts have stated they remain optimistic that prices will drop, despite these delays, due to the wholesale energy price trends remaining unchanged.
Recent reports have indicated that wholesale electricity & gas prices have fallen by over 40 per cent from the highs of 2008.
As is often seen when wholesale prices fall, it can take up to 6 months for suppliers to pass on the savings to their customers, so keeping an eye on the global and UK markets over the next few months is essential for any business that wants to stay on top of their energy costs.