The cost of buying natural gas on the wholesale market saw substantial falls in the final months of the year, benefiting Irish businesses.

The latest Business Energy Report, from Vayu Energy, shows that Irish wholesale prices were down 23.2% on average in the fourth quarter of 2015 compared to the same time last year. 

The price falls came on the back of surging gas supplies and suppressed demand, Vayu Energy noted.

For the year as a whole, Irish wholesale gas prices are down 4.7% compared with 2014 and down 18% compared to the average price recorded during the years from 2012 to 2014.

Vayu said that a fall in the value of the euro compared to sterling over the last year masked an even greater drop on the UK wholesale gas market. Ireland buys over 90% of its natural gas requirements from the UK.

Exceptionally mild weather across Europe means that gas demand for this year has fallen to lows not seen in a decade, despite the fact that gas has overtaken coal as the fuel of choice for the power generation sector.

"Healthy supply and a positive storage outlook are resulting in continued downward pressure on gas prices into the first half of next year," commented Gillian Lawlor, a senior energy analyst at Vayu.

She said that contracts for gas supply in the first quarter of 2016 are now trading 31% lower compared to the first quarter of this year and only a weather correction or a series of unplanned outages likely to result in prices firming.

The energy company also said that the Corrib gas field, off the coast of Mayo, is set to start supplying the Irish network early next year. Vayu said that during days of low demand - such as the summer months - Corrib is expected to meet the full gas demand of the country.

"The gas field is expected to meet approximately 56% of forecasted annual demand in its first year of production, thereby greatly enhancing Ireland's security of energy supply," the company stated.