Consumers unlikely to see gas price rise in 2011
CONSUMERS ARE unlikely to face an increase in the price of natural gas next year, according to An Bord Gáis, which supplies the bulk of the household market.
The State-owned company which supplies natural gas to almost 700,000 customers yesterday released figures showing that profits fell by more than 20 per cent in 2009 to €119 million from €150 million the previous year.
Sales were down more than 2 per cent at €1.35 billion from €1.38 billion.
Energy consumption fell on all fronts last year, but the company’s expansion in the electricity market helped to offset a drop in gas sales.
Natural gas prices are lower than in 2005, and chief executive John Mullins said conditions on world markets indicated that there were unlikely to be any material price increases this year.
“We are unlikely to see a price rise. As it is we’re purchasing gas for next year and there are no indications of any material price hikes.”
Most of the gas used in the Republic is bought on world markets and the prices paid there are central to determining what consumers and businesses pay for the fuel.
The State’s Commission for Energy Regulation (CER) sets the price that An Bord Gáis can charge householders for the coming year each autumn, but it has to take into account factors such as the wholesale cost of the commodity before making its decision.
Gas prices also have an impact on electricity costs as the fuel is widely used to generate power.
Mr Mullins suggested that electricity prices should also remain stable as a result of conditions on world markets.
An Bord Gáis also directly supplies electricity to industries and households. It entered the consumer market last year, recruiting 300,000 customers.
It is continuing its expansion into the electricity market with a €500 million investment in SWS, a wind-generation business, based mainly in the southwest, which it bought late last year for €500 million. The purchase helped bring the value of its fixed assets close to €3 billion at the end of 2009 from €2.45 billion 12 months earlier.
The development will create about 500 construction jobs over the next three years, according to a statement issued by the company yesterday.
It is also on schedule to begin operating a new 435 megawatt (MW) gas-fired electricity generator at Whitegate in Cork at the end of the summer, built at a cost of €400 million.
Mr Mullins warned yesterday that An Bord Gáis could have to look at building further interconnectors with Scotland to guarantee supplies if the Corrib natural gas field off the Mayo coast did not come on stream within the next two to three years.
Mr Mullins said the project would be vital to maintaining security of gas supplies in Ireland over the next 10 years.