Energy suppliers are expected to increase electricity and gas prices in the weeks ahead after PrepayPower became the first in the Irish market to announce an increase to its tariffs.
The pay-as-you-go operator said it had been forced to move as a result of an “increase in wholesale energy costs arising from the conflict in the Middle East”.
The company has 180,000 electricity customers and 60,000 gas customers, whose bills are to rise by 8.8 per cent and 10.6 per cent, respectively, from the beginning of next month.
The increase will add about €168 to the average household’s annual electricity bill and €171 to the average gas bill.
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Sinn Féin leader Mary Lou McDonald described the development as “another hammer blow to workers and families already pushed to the brink”. She said it was time for the Government to “take their heads out of the sand and introduce an emergency budget”.
A Government source pointed to “considerable supports” in the recently announced packages of measures totalling around €750 million, aimed at easing the impact of the energy crisis on households and businesses as well as items announced in last year’s budget like increased fuel allowance payments.
The Coalition has to date resisted Opposition calls to further intervene to help households already struggling with energy bills, but has indicated there will be some assistance in October’s budget.
Taoiseach Micheál Martin this week accepted the Government would “have to help people over next winter” and said this would be done in a “measured way”. However, pressure for immediate action is likely to grow if more energy providers, as expected, follow PrepayPower’s lead.
Global oil and gas prices have soared since Iran restricted passage through the Strait of Hormuz, a key transport route for global supplies, after a campaign of US-Israeli attacks began on February 28th.
While a ceasefire has been in place since April 8th, there has been a stand-off between Tehran and Washington following failed talks on a peace agreement.
Iran on Friday sent a new proposal for negotiations with the US, though its foreign ministry dampened expectations, saying it was not realistic to expect rapid progress.
In Israel, media outlets quoted officials saying the country is bracing for the possibility that negotiations between Washington and Tehran could collapse at the start of next week, resulting in US military strikes on Iranian gas and energy facilities and government infrastructure.
UN secretary general António Guterres warned that the consequences of the Middle East crisis are growing “dramatically worse with each passing hour”.
“Now is the time for dialogue,” he said.
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PrepayPower’s price increase is its first for more than three years. It was one of the providers that held off on raising prices last winter when many others increased theirs by between 10 and 15 per cent.
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“This news isn’t surprising, to be honest,” said Daragh Cassidy of price comparison and switching website bonkers.ie.
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He said he expected Electric Ireland, which is owned by the ESB and has close to 1.1 million customers, to announce a similar hike in electricity prices in the near future.
Wholesale gas prices had risen by 40 to 50 per cent since the start of the Iran war and “are around three times the level they were at before the war in Ukraine” began, he said.
“Unfortunately, this was always likely to lead to a hike in gas bills eventually, and most of the other suppliers will probably follow with a similar hike over the coming weeks.”
Electric Ireland and other domestic suppliers were contacted for comment on whether they plan to follow suit.
