Gas bills to rise 20% with a further increase likely

GAS bills will increase by 20% from today adding an extra €150 to the average annual bill.

Another rise is likely early next year for more than 500,000 Bord Gáis customers if the price of natural gas rises further.

Gas prices have increased 155% since 2002.

The latest price hike comes as a 17.5% rise in ESB bills took effect at the end of July.

The Commission for Energy Regulation (CER) has attributed its decision to approve the increase to rises in the price of gas.

Bord Gáis said yesterday it intends to liaise with the CER over coming months and to engage in frequent tariff reviews, so that natural gas is made available at the best market price.

“The price of natural gas on the wholesale market has increased by 108% from October 2007 to August 2008. Unfortunately, this leaves us no choice but to increase the cost of natural gas to our customers,” it said.

The Society of St Vincent de Paul said the increase will hit the most vulnerable the hardest.

With Ireland importing 90% of its gas from Britain, Bord Gáis said it has experienced an unprecedented rise in prices in global energy markets where gas costs, as determined by British wholesale gas prices, have increased 80% this year.

The regulator said the second price rise, to be announced in November, would depend on developments in the gas market.

Meanwhile a leading economists has said the Irish economy is now in a “painful recession”.

Rossa White of Davy Stockbrokers said taking into account payrolls, incomes, sales and production it is pretty clear that the economy is shrinking.

“The problems in the financial system have not gone away. In fact they have become worse, if anything, over the summer and the situation is not going to improve in 2008.

“Those problems have spilled into the real economy; they are affecting a much broader range than construction alone as credit is constrained,.” he said.