Business

Events in Yemen costing northern consumers more at the pumps

Scenes of the civil unrest in south Yemen

Unrest in Yemen - which is on the brink of civil war and which remains a hot spot for some of the world's most dangerous terrorist groups - is costing people in Northern Ireland at the pumps and in heating their homes and offices.

For it is the principal reason why the cost of oil rose 17 per cent in April, according to the latest firmus energy index.

That has made oil more expensive that at any time since the start of January, and it's hitting consumers in the pocket.

But the overall cost of energy remains well below the average level of the past five years, despite the latest, the industry barometer claims.

John French, firmus energy's director of regulation and pricing, said: “Oil prices were sent higher by fighting in Yemen.

"While not an important producer, the state occupies a strategic position close to the sea route between the Indian Ocean and the Mediterranean.

"Another factor was the decision by a number of oil producing countries to cut output. These so called shut-ins took almost three and a half million barrels a day out of production," he added.

Mr French said fears that the cost of oil could continue to soar may be unjustified according to several commentators.

"Investment in both shale oil and conventional oil production will keep a lid on prices. While this is not a universal view, the Economist magazine reckons that, for the present, oil prices will stay around or below current levels," he said.

“As the main energy source within the Northern Ireland economy, oil plays a key role in determining the level of the firmus energy index. Recent volatility in the index reflects variability in the price of oil rather than other fuels whose costs barely moved in April."

The price of gas fell by one per cent in April, ending marginally below the level reached in the same month in 2014 and well under rates achieved in previous years.

"Erratic production from Irish wind turbines forced more thermal plant ont o the grid. That pushed up wholesale electricity prices by around £1.60 a megawatt hour or by less than a fifth of a penny per kilowatt hour. This small rise in prices fed through directly into modestly higher profits for fossil fuelled power stations," said Mr French.

Coal prices stayed subdued despite interruptions to key supply chains in both Russia and Colombia. Global demand for coal remains soft as China curbs its appetite for imports partly over continuing concerns for its impact on the environment.

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