British government help urged over North gas price increases

The British government was today urged to provide financial aid to help some families in the North who are facing gas price increases of almost 30%.

The energy regulator Ofreg confirmed it had approved the massive and unprecedented hike by Phoenix Natural Gas.

After studying the proposal the regulator said it was confident the 29.9% rise reflected the cost at which the company was buying gas.

But Ofreg acknowledged the scale of the increase would be a major blow to consumers, particularly those on low incomes.

It will mean up to £200 (€296) a year more in costs for families who use the gas from October 1.

Almost 90,000 users will be affected, 80,000 of them domestic.

The Consumer Council said urgent measures were needed to protect those who would find it difficult to meet the new bills.

Wesley Henderson, the council’s director of energy, said it was a devastating blow. But he added: “Exceptional times call for exceptional measures.

“Low temperatures trigger special payments from government for consumers. Unprecedented price increases should also trigger special payments for vulnerable consumers.”

Dermot MacCann from Ofreg said: “We have seen significant rises in world energy costs in recent months, driven by rises in the underlying prices of wholesale oil, gas and coal.

“We have looked at the proposed Phoenix price rise along with the General Consumer Council and are content that the rise is appropriate given the increase in the underlying costs at which Phoenix are able to buy gas for use in Northern Ireland.

“It is solely the rise in wholesale gas costs that is driving this proposed price increase.”

Mr MacCann said raw wholesale gas costs now represent more than 50% of the costs consumers in the North see in their final bills.

Large rises have also been seen across the UK in the past year and more recently in the Irish Republic, he added.

“We understand that a price rise of this size is a significant blow to gas users in Northern Ireland, and particularly to those less-well-off households where difficulties with rising energy costs are already a real issue.

“If in future years wholesale gas costs fall, this will allow the potential for reductions in gas prices – this however cannot be guaranteed,” he said.

The Energy Saving Trust in the North urged householders to protect themselves against escalating gas, oil and electricity prices.

Trust head Noel Williams said: “Yet again we are seeing price rises and this is bad news for families throughout Northern Ireland especially with a predicted harsh winter ahead.

“The permanent solution to keeping bills low is an investment in energy-saving in the home and there is no better time to embrace energy efficiency.”

Mr Williams said energy-saving light bulbs and switching TVs off standby can make a big difference to the amount of fuel used in the home.

Phoenix Natural Gas chief executive Peter Dixon said the cost to buy natural gas for the next six months would be £20m (€29.6m) more than the same period last year.

He said: “We want to encourage all of our customers to make sure they are being as energy efficient as possible, so no one spends more than they have to heating their homes.”