An “astronomical” increase in the cost of domestic energy announced by one of the State’s leading providers will be replicated by other companies, consumers have been warned.
The Government expressed "strong concern" at the move by Bord Gáis Energy to increase its gas and electricity prices by 39 per cent and 27 per cent respectively.
Blaming high global wholesale energy costs and market volatility for the increases, the company said uncertainty and spiking prices were “expected to continue for some time”.
Bord Gáis Energy said the increases would add around €350 a year to the average household's annual gas bill and €340 to the average annual electricity bill. However, Daragh Cassidy of price comparison and switching website bonkers.ie said the average increase would be more like €390.
The latest increase comes after the company imposed two separate price increases last year which saw the annual cost of domestic energy for its customers climbing by in excess of €500.
“The outlook is bleak for energy customers,” said Mr Cassidy, who described the scale of the price hikes as “astronomical and unprecedented”.
It was likely to be the opening salvo in a series of price increases that would be rolled out by all providers in the days ahead, “and they will have an impact everywhere else,” he said.
“You might be able to turn off, or down, your heating, [but] you can’t not eat and higher energy prices are going to lead to higher food prices and higher prices for so many other goods and services.”
He pointed out that gas was used to produce most fertiliser “and there are now fears of a huge increase in food price inflation over the coming weeks”.
Admitting that the announcement was "not welcome news", Bord Gáis Energy's managing director Dave Kirwan blamed "continued increases in wholesale energy costs over the past two years, particularly in the past 12 months.
“This, together with the expectation that costs will remain both high and volatile for some time, means we are forced to increase our prices.”
In a statement after a Cabinet meeting on Tuesday, a Government spokesman said the “significant retail price increases announced today by Bord Gáis Energy are a matter of strong concern to the Government, particularly the impact on low-income households”.
Taoiseach Micheál Martin said prices were going up internationally and "to an exorbitant degree in Ireland", and the Government was in talks with the European Commission on the possibility of lowering taxation on energy to ease the burden on citizens.