Heating costs - Move to cut gas bills welcome

NEWS that gas bills could fall by up to 30% by the end of the year is most welcome, especially in the context of our rising inflation.

Following steep falls in the price of gas on world markets, Bord Gáis is cutting its bills by 10% next month.

The State-owned company also indicated yesterday that there would be a further cut of 15% to 20% by next October.

The board initially raised its prices by 33.8% after shortages in European gas supplies forced prices precipitately upwards.

Bord Gáis bought its winter gas supplies at some of the highest prices in 2006 before prices began to tumble dramatically when European supplies increased unexpectedly.

While the cost of oil has fallen to a two-year low, the fall in the price of petrol at the pumps has not matched the fall in the price of a barrel of oil.

When the price of oil went up, the impact could be seen the same day at the pumps.

Yet when prices fall, it takes weeks and even months to pass on the savings.

This is not just here; it an international phenomenon. Even though few of the gains have yet been passed on to consumers, Irish petrol prices are among the lowest in the eurozone.

Petrol in countries such as Holland and Belgium is currently over 26% more expensive, and prices in Germany, Italy, Portugal, Finland and France vary between 13% and 19% dearer.

On the other hand, prices in Spain and Greece are over 10% lower than in this country. Suppliers are clearly taking the gains while passing on the pain to consumers.

The fact that we are doing better than many other countries should not give rise to complacency.

It is not reflection of our performance so much as an indication of just how much the suppliers are getting away with.