Businesses 'reeling' from ESB and gas hikes: SFA

Price rises for gas and electricity will tell on the botton line for Irish manufacturing industry and will result in significant increases in the cost of raw materials, according to Director of the Small Firms Association Pat Delaney.

Mr Delaney warned the knock-on effect would be an increase in costs of goods to consumers.

Consumers and business groups are bracing themselves for gas and electricity charges to rise by 15% and 12% respectively. The Commissioner for Energy Regulation, Tom Reeves, is expected to approve the price hikes next week.

The ESB and Bord Gais are justifying the price hikes by claiming rising costs on the back of spiralling fuel prices worldwide.

The commissioner’s office signalled last July that ESB increases of 8% were likely from October next.

However, the office refused to comment on an additional 4.5% also being sought by ESB from next January. ESB wanted the 8% price rise to start next month.

Mr Delaney stated industry is "reeling" as the cost of energy and steel prices continue to climb.

"The escalation in energy prices is occurring in tandem with rising input costs in petrol, coal, metals, wages and administrative charges," he said.

"The indigenous manufacturing sector is being particularly badly hit by the large rise in the cost of steel which have seen prices for some grades double in the past 18 months on the back of a world recovery and the increase in demand from China which is expected to account for up to 35% of world consumption this year.

"These increases will have to be passed on to consumers by way of higher prices for goods."