Gas prices to small businesses to be liberalised

SMALL BUSINESSES could benefit from a fall in natural gas prices from next autumn, when the State’s energy regulator has signalled that it will allow competition to step up in that section of the market.

The Commission for Energy Regulation has announced that it will no longer set the price that State company An Bord Gáis can charge small businesses for supplying them with natural gas from October.

The regulator currently determines the price that the company can charge its small business customers for the fuel, although its competitors can charge whatever price they choose.

The regulator says there are at least three suppliers already competing in that market, and that two of them are independent operators which have more than 10 per cent of the business.

As a result, it is going to stop regulating the price that Bord Gáis charges small business customers, opening the market up to full liberalisations.

The move should increase competition and could lead to a fall in gas prices for small businesses. However, the regulator pointed out yesterday that it may not necessarily do so, as world markets and demand are a key influence on gas prices.

Bord Gáis welcomed the measure. Chief executive John Mullins said the decision would allow it to offer better products and services to small business customers.

However, the company said it was disappointed the regulator’s statement indicated that the company’s share of the residential market would have to fall below 60 per cent before the commission could liberalise that sector.

The regulator is going to continue to review this area of the market.