Gas bills set to fall €100 in October

HOUSEHOLDS can look forward to an average €100 a year saving on their gas bills from October after Bord Gáis revealed plans to cut its prices by almost 10%.

The reduction, if approved, will come on top of a 12% cut that came into effect in May. It means that the average annual domestic gas bill will have fallen by around €200 in six months.

The latest cut would remain in place for at least 12 months if the submission is given the go-ahead by the Commission for Energy Regulation (CER).

Bord Gáis said the softening of gas prices in Britain has prompted it to apply to the commission for the 9.8% price decrease. The company buys 85% of its gas from Britain and said it wants to pass on the savings to its 600,000 customers.

A CER spokesman said it would likely take it a month to make a decision on the latest Bord Gáis proposal, which will go out for public consultation shortly.

However, it is likely that the proposal has a better chance of approval given that it is a price cut rather than an increase.

Bord Gáis said if implemented, this decrease will reduce gas prices to residential users by an average of 9.3% and to small and medium businesses by 13.6%.

The average gas bill for a three-bedroomed home is €1,000, according to the semi-state company.

Managing director of Bord Gáis Energy, David Bunworth, said if approved by the commission, the latest cut will be the second price reduction this year.

Mr Bunworth also said when the price cut in May is combined with the proposed October cut average gas prices will have dropped to levels 22% below the typical bill in October 2006.

“Customers are getting considerable value just at a time when they need it most,” he said.

He also said at the end of 2008, prior to any of 2009 price decreases, gas prices in Ireland were 8% below the eurozone average for residential customers.

Chief executive of the Consumers’ Association Dermot Jewell said the move was not unexpected.

“Consumers need every assistance they can get and the timing of this is very important,” he said.

Bord Gáis has purchased between 60% and 70% of its gas needs in Britain for the next 12 months, which means it can commit to the price cut for a least a year.

It will not, however, apply to the electricity business, which has grown to 150,000 customers or 12% of the residential market.

The big switch-over campaign promised electricity prices of up to 14% lower than the ESB for the first year and at least 5% lower in the second and third years.

Fine Gael energy spokesman Simon Coveney said the regulator should immediately sanction the price cut and then go further. “As I have said many times, price reductions in the energy sector should be a good news story for the Irish economy,” he said.