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Gas price hike to cost families extra €70

HOUSEHOLDERS face the prospect of a double-digit increase in their gas bills in the autumn.

The Commission for Energy Regulation warned yesterday that it may hike gas prices, costing the average household at least €70 a year.

The regulator said it would keep prices for residential customers at current levels over the summer.

"The CER would like to highlight that current forecasts for the 12/13 gas year indicate a potential double-digit increase in domestic gas tariffs from October 2012.

"This potential increase relates to increases in wholesale gas prices, the deterioration of the euro against sterling and potential increases in transmission and distribution costs," it said in its quarterly Gas Tariff Review.

CER sets the gas price for Bord Gais, and while other companies are free to set their own tariffs, they are usually closely linked to the regulated rate.

The average household pays €727 a year for gas, meaning a 10pc increase would add at least €72 to that, with a 15pc increase adding €109.

Householders were already hit with a 20pc price increase last winter.

CER said it would carry out another review of household gas prices in July and any changes would be effective from October 1.

The Consumers Association of Ireland said it was shocked by the scale of the potential increase.

"A double digit increase would have a devastating impact on many, many households who are already struggling to pay," said CAI chief executive Dermott Jewell.

"It would be counterproductive because it would seriously worsen the bad debt situation, so Bord Gais would end up spending more trying to collect arrears," he said.

It would also be likely to have a knock-on effect on electricity prices given the importance of gas in its generation, he added.

While it tried to keep increases to a minimum, tariffs had to reflect the wholesale price of gas which accounted for 50pc of the cost to consumers, a spokesperson for CER said.

The latest Eurostat figures showed Irish customers paid slightly below the European average for gas, he said.

Bord Gais said that 128,000 households were in arrears on their gas and electricity bills, and the cost of debt collection had doubled to 1pc of their total costs.

Where there were 12 people working in debt collection in 2009, that had now increased to 90, a spokesperson said.

Official figures from CER show that more than 5,000 customers had their gas disconnected last year, and that this was a slight improvement on the 2010 figures.

The quarterly review published yesterday also showed that the mild winter meant customers used 13pc less gas than expected.

Irish Independent