Iberdrola is hiking the price of gas used for heating by 140%

The Spanish energy supplier is set to increase the price of gas to residential consumers by about 140%, as it seeks to pass on the global surge in costs.

The estimated annual price of gas per kilowatt-hour is set to rise from July 1 to €0.183 before taxes from the previous €0.071 euros, according to a letter to clients seen by Bloomberg News.

Iberdrola, Spain’s largest utility by market value, is increasing the price of gas to residential consumers by about 140%, as it seeks to pass on the global surge in costs.

The estimated annual price of gas per kilowatt-hour is set to rise from July 1 to €0.183 before taxes from the previous €0.071 euros, according to a letter to clients seen by Bloomberg News. A separate fixed charge paid by clients will be reduced from €6.08 per month to €5.75. The overall increase would be about 140%, according to estimates included in the letter.

This would be the price under current conditions and doesn’t take into account any variations that may occur in the wholesale market over the next 12 months, according to the letter.

Spain’s government is working on plans to cap the price of gas used by utilities to generate electricity. However, the caps do not include gas used for retail consumers. A large part of Spanish households use the fuel for heating and warm water.

Iberdrola and its main rivals, Endesa and Naturgy Energy Group, supply both gas and electricity to residential users.

A press officer for Iberdrola declined to comment.

On Tuesday, the energy supplier announced it would make a "controlled exit" from Ireland's electricity and gas market.

The company said the decision to leave the Irish market had come following the completion of an internal strategic review. It noted that market conditions and pricing were posing obstacles to the planned commercial growth of the firm.

Iberdrola also stated that the unprecedented increase in global wholesale energy costs had further exacerbated challenges for the company.

The Commission for Regulation of Utilities (CRU) has been formally notified and requested to begin the automatic transition of Iberdrola customers’ accounts to the regulator’s specified suppliers.

The regulator has designated suppliers which come into effect upon a firm's exit from the energy market. These are Bord Gáis Energy for gas, and Electric Ireland for electricity.

Bloomberg and Irish Examiner