Regulator gives Bord Gais green light to sell firms cheaper gas
Published 08/06/2011 | 05:00
BORD Gais, the state-owned gas company, will be allowed to sell gas cheaply to small- and medium-sized businesses from October following a ruling by the Commission for Energy Regulation.
The decision opens up the possibility of a price war among gas suppliers for business. Until now, Bord Gais has been banned from selling gas below certain prices to encourage competition within the sector.
The energy watchdog also hinted yesterday that a similar move may follow in the residential sector where Bord Gais is not allowed to compete on price with other suppliers.
Bord Gais chief executive John Mullins welcomed the decision yesterday. "This is good news for small and medium business customers as it means that from October 1, Bord Gais Energy will be able to compete on an equal basis for the first time and offer improved products and services to our business customers."
Mr Mullins was less pleased with the delay in liberalising the residential market.
The watchdog is waiting for Bord Gais's share of the market to fall below 60pc before allowing the former state-owned monopoly to compete on price. Mr Mullins also complained about the regulator's plan to force the company to change its name to encourage competition. No decision on this was made yesterday.
Meanwhile, global natural-gas use may rise more than 50pc by 2035 from 2010 levels and meet more than a quarter of global energy demand, the International Energy Agency said in a report earlier this week.
"We have seen remarkable developments in natural-gas markets in recent months," Nobuo Tanaka, executive director of the Paris-based adviser to developed nations, said in the report published called 'Are We Entering a Golden Age of Gas?' "There is a strong potential for gas to take on a larger role," Mr Tanaka said.