prices

The past decade has seen a dramatic change in the makeup of energy charges, shifting from a cost primarily made up of the wholesale price of electricity to a cost primarily made up of various third party charges. Not only do these third party charges keep increasing in size, more of them are being introduced. The most recent being the Energy Intensive Industries (EII) charge which has been introduced in an attempt to mitigate further damage to energy intensive businesses such as the recent collapse of the steel industry in the UK.

There were continued rises in the gas and electricity markets throughout May, which was supported by increasing oil and other commodity prices. Seasonal gas prices jumped 6.3% throughout the month and winter 16 gas prices rose by 6.9%. It is believed these increases were driven by much higher gas demand due to the UK energy mix being dominated by gas fired power stations.

Late on Thursday afternoon there was an announcement from the Russian oil minister that they will be meeting with OPEC in early February to discuss a 5% cut in oil production. The market has been flooded with over supply, which has caused the oil price to fall as low at $27 a barrel, however, this announcement caused a spike in prices with oil hitting $36 a barrel briefly before trading closed.

You would have noticed over the past two months that the price of diesel has slowly crept lower than that of petrol. Prices of both diesel and petrol have been falling since the price of oil crashed in the back end of 2014. Supermarkets have been very aggressive with their price cuts and this month have slashed diesel prices by 5p per litre, with the average cost of a litre of diesel now sitting at 112 pence.