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Wholesale Energy Prices Plummet by Over 40%

In a welcome announcement for Irish households, wholesale energy prices have dropped by 41.4% in January 2023 in comparison to the previous month, marking a 19.5% year-on-year reduction, according to the latest figures released by the Central Statistics Office (CSO).

This comes after a steep increase of 93% in December 2022. In addition, the Energy Products Index, which covers electricity, gas, and petroleum, also declined by 36.7% since the end of last year.

Pinergy, a leading energy provider, has stated that it will decrease its household retail prices by 7.1%, saving customers around €183 annually. However, despite Centrica, Bord Gais’ parent company, and Energia recording record-high profits, it could still take up to two years before households see a notable drop in energy prices, according to leading energy suppliers.

Electric Ireland explained to the Irish Examiner that this delay was because of a lag between movements in the wholesale and retail markets, along with suppliers’ hedging positions, further slowing the price fall.

While energy prices may be falling, domestic producer prices for manufactured goods saw an increase of 8.2% year-on-year in January 2023. Meanwhile, producer prices for exported goods increased by 3.5%. Food products, including dairy products, fruits, vegetables, and fish, witnessed significant price rises.

Producer prices for food increased by 6.2%, and the Food Products, Beverages & Tobacco index saw a 6.1% increase.

Wood product prices increased by over 23%, and other non-metallic products and beverages fell by 18% and 10.7%, respectively. Wholesale prices for construction products rose by 0.6% month-on-month and by 15.5% in the 12 months since January 2022.

In conclusion, the significant drop in wholesale energy prices should eventually trickle down to benefit households, but suppliers’ hedging positions are slowing the process.

Additionally, prices for various food and construction products have seen a rise, which could impact consumers’ finances.

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