Gas prices set to increase again

The price increase of 8.5 per cent announced by Bord Gais Energy today will mean the annual gas bill for hundreds of thousands of its customers has climbed by more than €230 in little more than a year.

The Commission for Energy Regulation (CER) gave the green light for the price increase today, and the latest move follows a 21.7 per cent hike rolled out by the State’s largest supplier 12 months ago.

In September of last year, the average annual gas bill for the company’s 440,000 domestic customers was €720. It climbed by €148 to €868 last October and by a further €14 earlier this year. The latest price hike will add a further €70 onto the average annual cost for its domestic customers.

The company said 10 per cent or 42,700 of its gas customers are currently in arrears of more than €100 for a period of longer than 60 days and accepted the latest price increase would put further pressure on tens of thousands of people already struggling to make ends meet.

However, a spokeswoman said the company had no alternative but to impose the price hike. She said the increase had been driven a fall in the value of the euro against sterling over the past 12 months; the rising cost of gas on the UK market; and increased network tariffs as a consequence of higher financing costs and a reduction in gas demand.

Last week the CER approved a series of increases for use of the natural gas transmission and distribution networks, which come into effect in October. The increases cover the use of the transmission system, which is the network’s backbone, and the distribution system, which delivers gas to customers and will affect all suppliers in the market.

While Electric Ireland, Airtricity and Flo-Gas have not announced any price increases, they all followed Bord Gais Energy’s lead last year when it last increased its prices.

The Bord Gas Energy spokeswoman said the company recognised that “price increases have an impact on customers, particularly in these difficult times, and we are committed to working with customers to help them to manage their bills.”

She said a “proactive approach” had been take to helping customers in arrears and that some 63,000 repayment plans have been agreed while 7,000 gas meters have been installed so far this year.

The number of customers in arrears has remained broadly stable over the last number of months - which the spokeswoman attributed to “the level of early intervention, repayment plans and meters”.#

Fianna Fáil spokesman on energy Michael Moynihan TD said the price increase calls into question the performance of the energy regulator and Department of Communications, Energy and Natural Resources.

"Over the past 12 months, Bord Gáis has been able to increase its gas prices by a whopping 30 per cent," he said.

"The role of the regulator must be to protect the interest of consumers and act as a break on the price hiking instincts of the utility company. Incredibly in this case, the State regulator has not only acceded to the utility's request but went above and beyond the price increase sought."