Oil and gas prices rose sharply over the weekend, with prices at the pump set to increase imminently.
Irish motorists look set to once again face increased fuel costs, following an increase in wholesale prices late last week.
The extent of the price hike is still unknown, although it is hoped that it will not be as pronounced as last summer's challenging fuel pricing, which saw the cost for a litre of diesel or petrol exceed the €2 mark.
Fuel prices hit record highs last summer. (Credit: Rolling News)
The increase in fuel costs comes as a direct result of OPEC's unexpected decision on Sunday to slash oil production, with the group of nine oil producing states agreeing to collectively cut their output by 2 million barrels per day.
Having already decreased production levels last October, the news of OPEC's decision caught many people by surprise, resulting in a 5% surge in Brent crude oil prices.
With crude oil now sitting at $85 per barrel, fears have been stoked that a return of $100 oil barrels could be imminent, a hypothesis which has seen shares in some of the globe's biggest oil corporations such as Shell and BP rise nearly 5%.
Oil companies such as Shell have seen stock prices rise following the news of OPEC's decision. (Credit: Getty Images)
Last year's price hike was initially driven by Russia's invasion of Ukraine. However, prices had stabilised in recent months, with the average price per barrel for 2023 so far totalling $82, a steep fall from last year's high of $133.
American banking giant Goldmann Sachs reacted to the news, with a statement reading that OPEC's decision was "consistent with their new doctrine to act pre-emptively because they can without significant losses in market share".
Bank of America also stated that a production cut of just $1 million barrels per day could see prices rise by up to $25 per barrel.
Wholesale gas price rises have led to concerns over gas and electricity pricing for consumers. (Credit: Rolling News)
More worrying news for Irish consumers:
In another concerning development for Irish consumers, European wholesale gas prices have also risen sharply.
Following a record peak of €310 per megawatt hour last summer, prices had fallen gradually across the industry. However, the rise in wholesale prices brings with it the likelihood that consumers will face loftier bills in the coming months.
Prices for gas on delivery for next month have already been impacted, with a 5% increase having been recorded.
There is a reliance on gas during the summer months when wind energy production falls. (Credit: Rolling News)
Rises in wholesale gas prices are watched with particular concern by those nations with a dependency on gas-powered power stations, such as Ireland.
In the spring and summer months, when wind does not blow to nearly the same extent as the winter months, power stations become increasingly dependent on gas to maintain output levels.
With the CSO having released data in February which highlighted a fall of 36.7% in the Energy Products Index for the end of 2022 when compared to 2021, there does however appear to be some manoeuvrability for consumers to incur the expected price rises.
Header image via Shutterstock
This article originally appeared on joe.ie
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