Gas price hikes - Consumers face double whammy

SNEAKY is the only word to describe a two-edged gas price hike which has left hapless customers facing a double whammy.

Long-suffering homeowners are now discovering that on top of last month’s 33.8 % price rise for Bord Gáis, triggered by rocketing world fuel costs, they are effectively being charged twice over by the State-owned company.

Not content with getting approval from the Commission for Energy Regulation for such a hefty rise — an increase that remains fixed in stone despite a sharp drop in fuel prices since then — the state-run monopoly has also been allowed to pile a further 33.8 % on top of the existing standing charge for piping gas to users.

With substantial bills now dropping through the letter box, the galling thing is that customers are bearing the brunt of this dual increase even though the cost of piping gas to domestic users has not gone up in the meantime.

In view of the unseasonably warm weather conditions, demand for gas cannot has hardly risen in recent weeks.

Therefore, it is hard to see how Bord Gáis can justify putting up supply charges, especially at such a high rate.

By no stretch of the imagination can the cost of supplying gas have gone up by anything approaching 33.8%.

Nonetheless, besides having to pay the 33.8% increase already loaded onto the price of gas, customers are also being charged more for piping supplies to their homes.

Like it or not, this dual increase has now become a reality for the vast majority of Bord Gáis’s 500,000 domestic customers.

On average, the annual bill is now €1,207, which is made up of €864 for gas and €343 for supply costs.

By the simple pretext of topping up the supply element of the bill, Bord Gáis is reaping a bonanza in extra revenue.

It is hard to see how this double-barreled increase can be justified.

Not surprisingly, Dermott Jewell, chief executive of the Consumers’ Association of Ireland (CAI) angrily describes the twin rise as unacceptable.

He claims that relatively few customers were aware that the 33.8% hike applies both to supply charges as well as gas usage.

From a customer’s viewpoint, the only warning of this two-edged rise coming down the track was a somewhat obtuse statement from Bord Gáis Supplies which said “the proposed tariffs include the costs which BGS pay to Bord Gáis Networks to cover the cost of moving gas through the transmission (high pressure) and distribution (low pressure) systems”.

It would be stretching the English language to portray this jargon as an open alert to gas users to tighten their belts in readiness for a price rise on two fronts.

Under these circumstances, according to the consumer body, it is virtually impossible for people to save money by using less gas because the standing charge has also gone up 33.8%.

Understandably, most consumers believed the 33.8% hike would apply solely to the price of gas.

Astonishingly, the regulator has justified the hike in supply charges on grounds that Bord Gáis charged too little in the past to cover the costs of distribution, administration and repairs.

That explanation simply does not wash.

At a time when gas prices are falling in Britain, and the cost of home heating oil is falling here, beleaguered householders can be forgiven for asking questions.

By giving permanency to twin-forked price increases, the regulatory commission and the state gas company have laid themselves open to charges of a double rip-off.