Energy cost rise signals ‘torture’ of hikes

STRUGGLING consumers are facing an onslaught of price rises over the coming months.

Electricity customers of Bord Gáis will see prices soar by 12% from Monday, while the cost of gas is to increase by more than 20% before the winter.

Homeowners already facing massive hikes in mortgage rates will also have to pay a €100 government household charge next year, pending the introduction of an even more onerous property tax.

Motorists, who have seen the price of fuel double in the past five years, face a hike in toll charges for motorways and may also be asked to pay for the use of other major national roads.

University registration fees are expected to double from next October.

News of the increases came as Jobs Minister Richard Bruton announced plans to allow businesses avoid paying agreed salary rates to mostly low-paid employees.

Under the proposals, companies will be able to opt out of Joint Labour Committee agreements in cases of financial difficulty.

“It is extraordinary,” said Dermot Jewell, chief executive of the Consumers’ Association of Ireland. “The idea that consumers can simply absorb one increase after another is totally unrealistic. These increases will not only hurt consumers, but they will also affect business because people will have far less to spend.

“We are getting to the situation where people simply cannot afford to pay their way. We are talking about people who are used to paying their way for years but are now finding they can’t.”

Bord Gáis applied to the Commission for Energy Regulation for a 28% gas price hike from October 1 and were granted an increase of about 22%. The company blames the rising cost of oil and gas for the hikes, which will result in a jump of €300 in the annual gas and electricity bills.

Responding to the latest Bord Gáis decision, Mr Jewell said: “We have a dilemma here. Bord Gáis already has a growing number of customers in arrears. This is just going to make things worse.”

Mr Jewell called on the Government to consider reducing VAT on utility charges.

“Something has to be done for the paying citizens of this country,” he said. “When you look at all these increases, the only common denominator is VAT and that is something the Government can control. Otherwise, this torture will continue for years.”

His views were echoed by Frank Conway, director of moneycoach.ie, who said the gas price rise will be a “significant financial blow” to thousands of customers.

“Already, Bord Gáis reports over 100,000 of its customers are in arrears. Further price rises are likely to add to growing arrears for the company, as well as other utility and credit providers, including mortgages, where there are 50,000 mortgage holders in arrears with their repayments,” he said.

Mr Conway said 2011 is becoming a year of significant inflation for basic necessities, including heating, housing and health.