‘Hidden’ gas tax is yet another example of the Rip-off Republic
During the consultation period on last year’s gas price increases I made a submission to the Commission for Energy Regulation presenting evidence of this and it has finally been published by the commission.
Since the revenues earned by the pipeline business feed into final gas prices, this award of excess revenue forms a significant portion of the percentage increase in final prices and constitutes a hidden tax on gas consumption on top of the global increases in the gas commodity price.
It is not possible to quantify the amount of this tax precisely, but preliminary estimates suggest that Irish gas consumers will have paid approximately €250 million extra between 2003 and 2007.
Despite its best efforts, the commission has not been able to rebut the case I have made.
This is another example of the ‘Rip-off Republic’ and springs directly from policy and regulatory failures.
The commission has sole responsibility for setting gas and electricity prices and tariffs; the Government has relinquished all responsibility in this area. If the commission gets its sums wrong and the regulated businesses suffer, they have recourse to an appeals mechanism.
If consumers lose out (as in this case), they have no protection.
The commission has locked itself into this tax-raising exercise until the end of 2007 and seems determined to see it through.
In the absence of adequate statutory or regulatory protection, it is surely time for Irish gas and electricity consumers to take steps to protect their interests.
Paul Hunt
49 Queens Road
Haywards Heath
West Sussex RH16 1EG
England
