Electricity and gas price cap but only £100 for oil users

A cap on gas and electricity prices announced by the British Government will be replicated in the north, while home-heating oil users - 68 per cent of customers in the north - will receive a payment of £100.

A new Energy Bill Relief Scheme has been announced.
A new Energy Bill Relief Scheme has been announced.

A new Energy Price Guarantee and a new Energy Bill Relief Scheme for the north were announced by the British Business Secretary Jacob Rees-Mogg on Wednesday.

The EBRS will provide energy bill relief for non-domestic customers in Britain, where discounts will be applied to energy usage initially between October 1, 2022 and March 31, 2023.

However, Mr. Rees-Mogg has confirmed that a similar scheme will be established in the north, providing a comparable level of support.

Mr. Rees-Mogg stated: "To administer support, the government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity."

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A comparable rate has yet to be set for the north, however, the British government has said that 'the designs of the GB scheme and the separate Northern Ireland scheme will be consistent, and will offer an equivalent level of support, but the impact on users will vary in Northern Ireland in particular since there are only limited numbers of fixed price contracts in the market'.

The parallel scheme in the north will be based on the same criteria and will offer comparable support, but will recognise the different market fundamentals, the Government has promised.

"If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly," stated Mr. Rees-Mogg.

The Business Secretary has also confirmed a Northern Ireland Energy Price Guarantee that will offer households the same level of gas and electricity bill support as an equivalent scheme in Great Britain which is expected to save the average gas and electricity using household £1,000 per year.

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Households in the north will also receive a £400 discount on bills through the Northern Ireland Energy Bills Support Scheme (NI EBSS), the same support as is available in Great Britain.

However, home-heating oil users - 68 per cent of customers in the north - who are not able to receive support for their heating costs through the Energy Price Guarantee will receive an additional payment of £100.

"This might be because they live in an area of the UK that is not served by the gas grid and is to compensate for the rising costs of alternative fuels such as heating oil," the government said.

The Consumer Council has welcomed the progress announced by the Department for Business, Energy and Industrial Strategy (BEIS) on the delivery of the Energy Bill Support Scheme and Energy Price Guarantee.

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However, it is calling for an urgent update on how appropriate support from the UK Government will be afforded to all households regardless of how they heat their home as heating oil is used by more than two thirds of domestic households in the north.

Peter McClenaghan, Director of Infrastructure and Sustainability at the Consumer Council, said: “The commitment from the Prime Minister that support will be provided to Northern Ireland consumers whether they use heating oil or natural gas is welcome.

"The Consumer Council is keen to see more progress in the development of support for consumers who primarily use home heating oil to heat their homes. This should be support over and above the additional payment of £100 to all households across the UK who are not served by the gas grid.

"We have met with BEIS and the Northern Ireland Office and outlined the challenges Northern Ireland heating oil users face given the Consumer Council’s weekly heating oil survey shows heating oil prices in Northern Ireland remain over £1 per litre, more than twice the ten-year average price. The Northern Ireland Oil Federation has also outlined those challenges to BEIS.

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"These high prices combined with the requirement to make bulk purchases, exposure to a volatile global oil market, often inefficient boilers and a lack of consumer protection measures, particularly support for vulnerable consumers, create huge challenges for heating oil users which include many rural consumers who have no access to the natural gas network.

"This is particularly worrying for Northern Ireland’s lowest earning households, who according to our research undertaken in the first quarter of 2022, have a discretionary income of just £29 per week.”