Consumers and businesses are to be hit by a further substantial price increase with the announcement of a rise in ESB charges averaging almost 10 per cent from January next.
Domestic customers, however, will be worst affected and see charges rise by 13.25 per cent. Small and medium-sized businesses will pay 8.42 per cent more, and large industrial customers 4.2 per cent more, as a result of a price review by the energy regulator. The increases come on top of an average 8.9 per cent rise imposed last year.
Opposition politicians last night reacted angrily to the move, linking it to a range of other increases in VHI charges, third-level college registration fees, hospital charges and drug costs.
Business representatives said it came on top of insurance cost increases which have hit companies and consumers.
The Consumers' Association of Ireland said it did not see any justification for the increases, which have been almost 24 per cent in the past two years.
Its chairman, Mr Michael Kilcoyne, said the Government would allow that increase, but when the ESB tried to diversify into Poland the Government intervened to stop the move. "The Government keeps sticking its finger in, but won't do it to stop consumer price increases," he said.
He warned that unless the Government "gets its act together" to act against increasing rises since the introduction of the euro, the association was likely to follow the "extremely effective" boycott of shops and services by consumers in Greece this week because of price increases. It would make its decision within 10 days, Mr Kilcoyne said.
While there was no Government reaction last night, the effect on inflation will add to its difficulties in trying to control the national finances. The increase will add 0.2 of a percentage point to the domestic inflation rate, Europe's highest.
The increases were determined by the independent Commission for Energy Regulation based on ESB costs. The rise is designed partly to make electricity generation attractive to the private sector, and increase competition.
The Irish Small and Medium Enterprises Association (ISME) denounced the increase, saying it was "unwarranted and will further undermine the competitiveness of small and medium-sized enterprises at a time when production costs are already running out of control".
Warning that businesses could close down, ISME's chief executive, Mr Mark Fielding, said: "It's got to the stage where this country has become too expensive to set up and operate in."
He said the increase came on top of increased insurance and wage costs. "The CER was established to oversee the introduction of competition into the energy market. To date, ISME members have realised none of the benefits of competition and have in fact suffered a price increase of over 21.42 per cent." .
The ESB said that despite the increases, household prices remained 9 per cent cheaper than in Northern Ireland, 35 per cent cheaper than in Denmark and 18 per cent cheaper than in Germany.
However, Fine Gael's spokesman on enterprise, Mr Phil Hogan, claimed the increase was further proof that the Government "was storing up bad news" until after the election was over.
"This increase comes on top of rises in VHI premiums, transport costs and college registration fees and will add significantly to the financial burden on consumers," he said.
Labour's energy spokesman, Mr Eamon Gilmore, said the rise was "a further imposition on families already reeling from a whole spate of price increases".