Household gas and electricity bills could rise by another €400 by winter

Experts said electricity prices could rise by another €300 to €400 a year, with similar rises in residential gas prices.

Energy scientist Dr Paul Deane of University College Cork (UCC) said households and businesses were facing more hikes after the summer due to a new surge in wholesale gas costs.

He said Irish energy suppliers in this market had been able to hedge against some of the wholesale price rises up to now by buying supplies in advance.

But these financial arrangements were due to unwind in the summer and would lead to higher prices.

Already this year most of the major suppliers in this market have hiked prices by up to 40pc.

This comes after 35 separate price rise announcements last year.

The move by the Russians to suspend gas supplies to Poland and Bulgaria has sent wholesale gas prices up sharply.

Wholesale gas prices are now six times higher than they were this time last year. Energy inflation is now running at over 40pc in the euro area on an annual basis.

Around half of the electricity in this country is generated from gas, as well as hundreds of thousands of homes using gas to fuel their heating systems.

The latest surge in wholesale energy costs comes amid a row over proposals from Environment Minister Eamon Ryan to restrict the commercial sale of turf.

Dr Deane said that up to now the Russians had threatened to restrict gas supplies to Europe but had not followed through on it. This had succeeded in keeping gas prices high.

But the move to cut off Poland and Bulgaria was a new departure which will push prices even higher.

“This will feed into higher energy prices in this country when we come out of the summer.”

He said wholesale energy prices were high and were likely to stay high.

Energy suppliers in this market had hedging contracts in place to protect them from some of the higher wholesale costs. But these deals were due to unwind in the coming months, he said.

Households have seen the average annual electricity bill rise from €1,100 at the beginning of last year to €1,900 a year now following a spate of price hikes.

The average annual gas bill has shot up from €800 to €1,400, over the same period, according to price comparison site Bonkers.ie.

Home-heating costs have doubled to around €1,250 for 1,000 litres.

Daragh Cassidy of Bonkers.ie said the major fear was always that Vladimir Putin would start using energy as a blackmailing tool against Europe.

And that is what now appears to be happening.

“Since the autumn of 2020, when energy prices first began to rise, the average household’s annual electricity bill has gone up by around €800 and the average gas bill by around €600,” he said.

Some suppliers have more than doubled their prices.

“Despite these huge increases it was always highly likely that energy prices would increase again later in the year given the sustained high price of gas on wholesale markets.

“But if Putin continues to restrict the supply of gas into Europe it almost makes it a certainty.”

Chairman of the Consumers Association, Michael Kilcoyne, called on energy companies to absorb the latest cost rises rather than automatically passing them on to consumers.

He said energy companies like ESB, which owns Electric Ireland, were extremely profitable. They should pay smaller or no dividends, he said.