Households face electricity bill increases of around €11 a month from August when Bord Gáis Energy will hike prices in the face of surging wholesale costs.
From August 8th Bord Gáis will increase gas prices by 12.7 per cent, adding €8.36 to the average monthly bill, and boost electricity charges by 11.6 per cent, or €11.39 a month on average.
Dave Kirwan, managing director, Bord Gáis Energy blamed sustained wholesale price increases over the past six months for the decision.
“Unfortunately, we now have to reflect these higher costs in our gas and electricity prices,” he said.
“We have sought to mitigate this impact and have not taken this decision lightly but the wholesale pressures are a market challenge outside of our control.”
The gas price increase is the company’s first in more than two years. It cut prices for the fuel in October 2019.
The company's move follows last week's announcement by rival, ESB subsidiary Electric Ireland, that it was increasing its prices, adding an average of €8.20 a month to household electricity bills.
Oil, gas and coal prices have been rising on world markets this year as countries re-open following 2020 Covid lockdowns.
This is in turn driving up Irish wholesale electricity costs, which have almost trebled over the last 12 months from lows of €30 to €40 a mega watt hour – the unit in which power is sold – to more than €100.
Power companies use natural gas to produce around 60 per cent of the electricity used in the Republic, while coal is burned to generate around 10 per cent to 15 per cent.
Lower than usual wind speeds this year, in both winter and summer, have cut the amount of renewable electricity available, putting a further squeeze on supplies.
SSE Airtricity, Flogas, Iberdrola and Energia, have increased household charges this year.
Mr Kirwan maintained that Bord Gáis Energy had worked to avoid price increases as long as possible.
He pointed out that the company froze gas and electricity charges last autumn ahead of the colder winter period, despite increasing network and system costs.
“Bord Gáis Energy is committed to providing the best value possible, but we can no longer continue to absorb rising wholesale gas and electricity costs,” he said.
Mr Kirwan acknowledged that the last 18 months had been difficult for most people.
“We continually encourage anyone facing difficulty to engage with us and we will work together to develop a suitable payment plan,” he added.