Bord Gáis seeks go-ahead for price rise of up to 8%

BORD GÁIS, which supplies natural gas to over 500,000 households and 1,700 small businesses, will this week ask the Commission for Energy Regulation to give the go-ahead for an increase of between 5 per cent and 8 per cent in domestic charges for natural gas from January 1st.

This will add between €3.50 and €5.60 a month to the average household natural gas bill. In July, the commission approved a 20 per cent increase in the price charged to households and small businesses.

This came into effect last month and added around €13 a month to the average domestic bill.

World gas prices have been falling in recent weeks, but they remain higher than they were last year.

Charges for immediate delivery fell yesterday in London, but prices for next month's delivery rose by 1.3 pence a unit to 67.10p. Most of the fuel is traded on forward markets, that is, purchasers are buying to meet anticipated needs.

The commission sets domestic gas and electricity prices, and bases its decisions on submissions, world prices and other factors, including allowing suppliers to make enough profit to ensure that they can continue to invest in their businesses.

Bord Gáis is entitled to a €17.5 million clawback from the market for last year, but it is understood that the company is forgoing this.

Supplies from the Corrib gas field could help ease pressures to increase the fuel's price when it eventually comes on stream.

An accident that damaged a specialist pipelaying vessel has delayed work on putting the infrastructure needed to bring gas ashore from the field off the Mayo coast.

The gas will be sold at world prices by the field's licencees, Shell EP Ireland and Statoil, but industry sources suggested yesterday that it would result in some network savings, which would help ease the upward pressure on the cost of the fuel.

Much of the natural gas used in Ireland is pumped via Scotland from North Sea producers based in Norway.

A recent problem with one of the pipes which the gas flows through has increased the cost of the fuel as it means that there is less of it available from this source than had been expected.

Supplies from the Corrib field would cut dependence on supplies from Norway. The area contains enough gas to supply Irish needs for a decade and the exploration industry believes that there may be more, similar sized fields nearby.

The ESB, which supplies electricity to 1.7 million homes in the Republic, is expected to make a submission on prices in November.

The State company intends using €300 million from its balance sheet to offset the impact of increases in the prices charged to consumers.

The ESB board yesterday approved a three-year extension for the contract of the company's current chief executive, Pádraig McManus.

Mr McManus was appointed in May 2002 and his contract was due to expire next May. He will now stay on for three years beyond that date.

Meanwhile, Minister for Foreign Affairs Micheál Martin will formally launch the construction of Bord Gáis' new electricity generating plant at Whitegate on Cork harbour.