Heating bills to hit new high as Bord Gais seeks 20pc hike
Related Articles
Thursday May 15 2008
HOME heating bills are set to soar by almost 20pc later this year.
Bord Gais yesterday signalled it was to seek a price increase from the energy regulator, which is due to come into effect from October.
The hike -- which will add almost €190 to the average annual household bill -- was condemned by consumer groups, who pointed out that the company recorded a pre-tax profit of €166m last year, up 29pc on the previous year.
In July, the energy firm will request the Commission for Energy Regulation (CER) to allow them to hike prices by up to 19pc.
Speaking at the presentation of its annual results for 2007, chief executive John Mullin said CER would be asked to agree to the price rise because of the rising cost of gas on the international market.
"The price could come down next year and that benefit will go back to the customer," he added. But the price will rise even further if the wholesale price of gas continues its upward trend.
Last night the potential price hike was condemned by Liz McManus, Labour spokeswoman on energy, who said thousands of people who were already facing fuel poverty now faced even greater hardship this winter. She pointed out that figures from the Money Advice and Budgeting Service (MABS) showed that the rising cost of living was having a direct impact on the ability of families to pay for necessities. In the first quarter of 2006, a total of €864,000 was outstanding in energy costs -- but 12 months later this had almost doubled to €1.5m.
"There are 60,000 to 100,000 families living in consistent fuel poverty," said Ms McManus.
"This increase is going to put even more pressure on the people who are already getting deeper and deeper into debt."
Michael Kilcoyne of the Consumers Association of Ireland said it was "unbelievable" that the company was putting up prices while profits soared.
"They appear to have no regard whatsoever for the consumer," he said, adding that CER does little more than "rubber-stamp" any requests for price increases.
"It raises the question about how effective the CER is and what his function is to consumers."
He said he expected the Corrib gas field to come on stream by the end of next year supplying more than half of the country's demands.
The massive resource would guarantee both security of supply and offer the possibility of price cuts, he added.
However, in its annual report, Bord Gais warned international gas and oil prices had reached new peaks in the past year.
"While Bord Gais was in a position in 2007 to introduce an average 20pc price decrease for residential and SME customers, a price increase is likely in October 2008,'' the company said.
If oil and gas remains at high levels on the international market, it is likely that the ESB will also apply for a rise as some of its energy comes from gas.
- Pat Boyle and Edel Kennedy
