Worst rip-offs are in areas regulated by Government

THE massive electricity price hike sanctioned by the energy regulator further cements Ireland’s position as the Eurozone’s most expensive country and will result in many domestic users and manufacturers being unable to meet their ESB bills.

This hike is excessive because recent figures show that inflation in electricity, fuels, water and rents are rising almost 2% higher than our Eurozone counterparts, suggesting consumers are getting bad value from the Government in the sectors it regulates and our energy suppliers are using a time of rising fuel prices to take a higher mark-up.

Neither the domestic consumer nor the manufacturing sector is in a position to meet such an excessive price increase of almost 20%.

This is especially true when you consider that there have been very substantial price increases over the past four years, with electricity prices alone rising by 50% for domestic customers since 2002.

One international study has shown that Irish domestic users are currently paying 46% more than their UK counterparts.

Indeed, another study by international consultants Accenture for the 2004/2005 period — before the current oil crisis — showed that Ireland had the dearest electricity in the EU.

This price rise comes on the back of a series of ESB increases in the last number of years — 3% in January ‘06, 4% in January ‘05, 8.6% in October ‘04 and 5% in January ‘04.

At the moment an average domestic ESB bill amounts to approximately 123 for every two months.

If this latest price increase is allowed to go ahead, consumers will see their bills increase by around 25.

In fact, this hike confirms that the public are being ripped off in sectors the Government regulates.

Inflation in services is running at over twice the rate of the Eurozone (3.2% v 1.4%). Most of these — such as health, education, transport and communications — are dominated by Government.

This impression is further confirmed when one considers that Eurozone inflation in electricity, fuels, water and rents is at 5%, almost 2% lower than Ireland’s rate of 6.9%.

Hard-working families and hard-pressed businesses will suffer from this unwarranted, massive increase and the regulator should not have permitted such an outrageous hike.

Alongside this, such increases would not be so necessary if the Government were serious about investing in renewable energy in line with Fine Gael’s comprehensive policy, leaving the country less reliant on the instability of international oil markets.

I also have to question the motivations of the Government, which will benefit hugely from this increase through increased VAT receipts.

Once again, the consumer will be forced to pay through the nose while the Government reaps the benefits.

Cllr Tim Lombard

Granig

Minane Bridge

Co Cork