North's energy consumers face fresh price hike

CONSUMERS IN Northern Ireland could face a double whammy in energy bills following the decision by the North's key gas supplier to increase prices by 28 per cent.

Phoenix Natural Gas said it intends to increase the price of natural gas from next month because the wholesale cost of gas has reached a record high.

It could mean some consumers will see their average yearly gas bill rise by nearly £130 to close on £584.

David Strahan, general manager of Phoenix Supply Ltd, said the increase in prices had been unavoidable for the company.

"We have been able to hold our price at the current reduced level throughout the peak winter heating period, when customers use most gas, but in the face of such large increases in wholesale gas costs, we have no alternative but to review our prices."

Phoenix Natural Gas, which has more than 90,000 customers in the North, has come under fire for previous gas price hikes which it has also blamed on wholesale gas price increases.

The company, which started operating in the North more than 12 years ago, has a regulatory asset value of about £360 million. It claims the cost of natural gas in the North remains competitive.

Mr Strahan says consumers who use heating oil have also seen prices increases, in some instances of more than 66 per cent. "Even after this increase, heating oil will be 20 per cent more expensive than natural gas.

"If, as we hope, worldwide prices fall, Phoenix will reduce its prices accordingly."

The North's utility regulator said yesterday he fully expects the region's main electricity supplier, Northern Ireland Electricity, to follow Phoenix and increase its prices.

Utility regulator chief executive Iain Osborne said electricity providers were exposed to the same underlying fuel costs as gas suppliers. "It is hard to see how we could avoid an increase in electricity prices. NIE will want to come and see us and I expect that we may see price increases later this year.

"What we really need to do now in Northern Ireland is get an action plan in place to deal with the impact of fuel costs particularly on those who are fuel poor.

"What is needed is political leadership - we need to understand whether there is public money available to help those who are fuel poor and what scale of programme is available."

Mr Osborne says the "immaturity" of the North's energy market also has an impact on gas and electricity prices.

More competition might stimulate more benefits for energy consumers, he believes.

Business bodies say they are alarmed by the scale of the increases in energy costs in the North.

The Federation of Small Businesses said the price hikes will pile pressure on the North's small business community.

According to research by the Department for Social Development in the North, one in three households are now classified as living in fuel poverty.

The Northern Ireland Consumer Council has warned that the increase in energy costs could leave many low income households in a "crisis" situation.