but does this apply to surging energy prices?
Over the last few months, we have been experiencing an energy cost crisis in Europe influenced by a wide variety of factors. Electricity and gas have been traded at peak prices on the energy exchanges, and this has had a direct influence on the industrial sector’s manufacturing costs across Europe. Today’s developments in Ukraine will further add to the challenges of the manufacturing sector; with oil prices surging to a seven-year high (a 6% increase overnight) and gas prices soaring by over 40%.
Since the beginning of January, all our key manufacturers have announced steep price increases based on rising energy costs. However, if oil and gas remain at today’s rates, manufacturers will have no choice but to further increase their prices, stoking inflation to even higher levels.
When our manufacturers increased their prices last month, many statements were made saying their latest price rises would be temporary, once the energy prices fall, they too will adjust their product prices accordingly. However, I’m now questioning if considering the events unfolding in Russia and Ukraine if we will see prices coming down. From my perspective, I can only see prices continuing to rise. What do you think?
Costs and prices set aside, my biggest thoughts today go out to all those people living in Ukraine, I can’t imagine how they must be feeling. I truly hope this situation resolves quickly and we do not see any senseless loss of life.
Pray for peace on Earth.
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