Utility Regulator warns of fresh gas price hikes within weeks

The Utility Regulator Chief Executive John French has warned gas consumers to expect fresh price hikes in the coming weeks.

He issued the warning as he announced tariff reviews for two of the major gas suppliers in the north, SSE Airtricity Gas Supply and Firmus Energy.

Mr. French said he will be keeping electricity prices under review.

“We are reviewing the tariffs of SSE Airtricity Gas Supply and Firmus Energy, as unfortunately wholesale gas prices have significantly increased since the last tariff announcement on 1 June.

Gas prices are set to rise again, the Utility Regulator Chief Executive John French has warned.

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“Wholesale gas prices have risen considerably over the last six weeks, as Russia has reduced its gas flows into the key Nord Stream 1 pipeline to Europe by 80 per cent.

"These price movements have been further exacerbated by Asian and South American countries buying more liquefied natural gas (LNG), the higher than usual temperatures in Europe, outages in the French nuclear power station fleet, and historic price rises in the US gas market.

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“The price impact of these events has been considerable. For example, wholesale gas being sold for consumption in winter 2022 was trading at £2.41 per therm on 1 June 2022. By market close on August 16, 2022, it had reached £5.62 per therm.

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"Unfortunately, these increases in wholesale gas price increases will have an impact on consumers in Northern Ireland, as wholesale energy costs now make up three quarters of consumers’ bills.

“Therefore, there will be increases in the regulated gas tariffs (SSE Airtricity Gas supply and Firmus Energy) in Northern Ireland. These increases will be announced in the coming weeks, once our reviews have been completed. At this stage, we are reviewing regulated gas tariffs only, and are keeping the situation on regulated electricity tariffs under review," he stated.

Mr. French said it gave him no pleasure to make the announcement given the ongoing cost of living crisis.

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"I recognise that the impact of these further price increases is another severe blow for consumers. While the underlying causes of these tariff increases are outside our control, we remain focused on doing whatever we can to support consumers in these desperate times," he said.

The Utility Regulator boss said he recently met the British Chancellor of the Exchequer Nadim Zahawi and local ministers twice in order to work to secure the delivery of a £400 energy bill support scheme for every household in the north.

"The timely delivery of this support to local households is critical, and we continue to work with others to find a pragmatic and robust way of getting this money to consumers as soon as possible.

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“It is also incumbent on us as a regulator, and others across government and industry, to work together to support consumers as winter approaches. For that reason, I have invited government departments, energy suppliers and the Consumer Council for Northern Ireland to meet to look urgently at other practical steps that can be taken to support consumers this winter.

“Furthermore, we are using everything in our regulatory toolbox to support consumers. I will continue to remind energy suppliers of the need for a sympathetic approach to customers’ ability to pay, and of their obligations to avoid customer disconnections and consider other approaches to protecting people in debt.

“Consumers who are worried about the impact of these higher prices should always contact their electricity or gas supplier in the first instance, to discuss the options available to them. In addition, there are also a number of agencies who can provide free and independent advice to households, including Advice NI, Christians Against Poverty, and Money and Pensions Service.”