Increase comes amid 40-year inflation high of 10pc
Household budgets are set to be walloped by more energy price hikes.
The move by Electric Ireland to hit its more-than one-million customers with a fourth increase in a year has prompted fears other suppliers will now increase their prices again, triggering a new energy price-rise spiral.
Last year there were 35 separate energy price-rise announcements, with 14 price-hike announcements so far this year.
It comes as new figures show inflation hit a 40-year record of close to 10pc in this country last month.
Electric Ireland is pushing up its electricity unit costs by 11pc in August, and the electricity standing charge by the same amount.
This means that if its electricity customers turn off all their lights and other electrical devices they will still end up paying €300 over a year to the State-owned energy supplier in standing charges.
The latest price rise is despite ESB, which owns Electric Ireland, making a profit of €679m last year.
It is the second Electric Ireland price increase this year, and the fourth since August last year.
The latest move will add €164 a year to the cost of electricity for its 1.1 million customers.
When the latest hike takes effect, electricity prices at the State-owned company will have gone up by 67pc cumulatively since last year .
It is pushing up gas prices by 32pc in August, with the gas standing charge going up the same percentage.
The rise in the standing charge will add €42 a year to the average bill. Gas costs will be €350 a year more expensive after the latest rise.
The four rises will mean electricity bills will have risen by about €670, including Vat, since last June.
And gas bills will have gone up by €650, including Vat.
In percentage terms, Electric Ireland gas prices will have gone up by 93pc when the new increase is implemented for its approximately 145,000 gas customers.
There were also rises in April this year, and in November and in August last year.
The company blamed a 400pc rise in the cost of wholesale gas for the repeated price increases and insisted it has the lowest standard unit rate for electricity in the market.
Electric Ireland also said it has pledged to provide €3m for a new hardship fund to support its customers.
Interim executive director at Electric Ireland, Suzanne Ward, said: “We delayed this increase as long as we could, but unfortunately, the situation in eastern Europe and a reduction in the reliability of gas flows has resulted in sustained higher energy costs throughout Europe.
“We have seen a very substantial increase in the cost of wholesale gas, which in turn impacts both our gas and electricity prices.”
Asked how the latest rise can be justified given its parent company, ESB, made a record €679m profit last year, Electric Ireland said it operates in a competitive environment under the Irish economic competitiveness regulations and is subject to the same market volatility pressure as other energy suppliers.
Daragh Cassidy of price comparison site Bonkers.ie said that given Electric Ireland’s size, the increases will be felt badly by many households nationwide.
“We’re heading into next winter with gas and electricity prices at absolutely astronomical levels. And it might even get worse,” he said.
Higher energy costs are the main reason inflation is estimated to have hit 9.6pc in this country last month.
Energy costs in Ireland are estimated to have risen by 54pc since June last year.
Eurozone inflation is expected to come in at 8.6pc in June, Eurostat said. Economists said the Europe-wide rise in inflation will copper-fasten moves by the European Central Bank to begin a succession of interest rate rises this month.
Goodbody Stockbrokers economist Dermot O’Leary said the squeeze on disposable incomes is set to get worse later in the year.