Energy suppliers are warning that wholesale gas is being traded at significantly higher prices than it was a fortnight ago.
Winter 2012 - cold in the UK, but much colder in Europe
In winter 2012 we rely on imported gas more than ever. This was the main reason given for the recent winter price rises made by all big six suppliers, and it seems foreign imports are not just a problem in the UK.
Factors currently affecting wholesale gas prices:
- Cold weather in the UK is increasing our demand for gas and electricity.
- Exceptionally cold weather in Europe for the last few weeks – Italy saw its first snowfall in Rome for 26 years and temperatures went down to -21℃.
- Gazprom has failed to deliver enough gas to Europe, leading to big shortages in Italy, Poland, Austria, Greece, Romania, Hungary, Slovakia and Bulgaria.
- Liquified Natural Gas (LNG) deliveries are infrequent and not supplementing the shortfall by much.
With winter 2012 temperatures across Europe reaching in many cases around -20℃ to -30℃, it seems unlikely that wholesale gas prices will decrease any time soon.
It is also worth noting that much electricity is generated by gas-fired power stations, so there is also a knock-on effect on wholesale electricity prices, which are in turn passed on to consumers and businesses.
Unfortunately it seems that, as in the last couple of years, the only noticeable long-term trend in energy prices, is up.
Business prices can be particularly vulnerable to fluctuations in wholesale prices. Enquire on our business gas or large gas users page if you would like assistance in fully tendering your supplies to the market at this difficult time.
Sources: AFP | Voice Of America | Star Telegram