34% gas price hike with no end in sight sparks calls for urgent action

The announcement by Firmus Energy of a 33.57% hike in its natural gas tariff in the ten towns network - including Derry and Limavady - has sparked renewed calls for action on what has been branded a ‘cost of living crisis’.

On Tuesday the north’s largest gas supplier said the increase will take effect from February 24, 2022, blaming further increases in global wholesale gas prices. It will add an extra £5.95 per week to the average household bill.

Announcing the increase Dr. David Dobbin, Chairman of Firmus Energy, said: “Unfortunately, due to the sustained high prices in wholesale gas markets we have had no option but to make a further increase in our gas tariff.

“Very low gas stocks; reduced Russian supplies and concerns about the Ukraine situation are all combining to keep European gas prices high. The market crisis has been well publicised, and markets look increasingly like they are going to remain high for some time.”

Derry MP Colum Eastwood who is calling for urgent action.

Dr. Dobbins said it was an issue affecting suppliers and the energy sector in general.

“As we have previously stated this is not just a firmus issue, but a challenge faced by every local and national supplier of gas and electricity all of whom are affected by the huge upsurges which have taken place in wholesale gas and energy costs.

“Regrettably, we, in NI, are at the mercy of the global wholesale gas market and are unable to influence these prices. We know this is another unwelcome increase which will have a disproportionate effect on those of our customers who are the most vulnerable. We have been providing financial support to the Department for Communities scheme to help those most in need and will continue to do so. If any of our customers feel that they require further support, they should contact us directly to see how we can help.”

John French, Utility Regulator Chief Executive said the price hike increase followed a review that took place against a continuing increase in wholesale gas prices, which have risen significantly since Firmus Energy’s last tariff increase on December 3, 2021.

The Utility Regulator John French has said there appears to be no end in sight for above trend wholesale gas prices and this will result in price hikes for citizens.

This was conducted in partnership with the Department for the Economy and the Consumer Council.

“This review has unfortunately concluded that a 33.57% increase from February 24, 2022 is needed to reflect the ongoing and exceptional price spikes that have been experienced in the global wholesale market. This will regrettably mean that the average annual household gas bill in the Ten Towns licence area will increase to £1,293 per year.

“The unparalleled increases in the cost of wholesale energy at a global level have persisted and continue to impact on supplier costs. This has been exacerbated by the overall volatility within the market, with significant price movements occurring on a daily basis.

“Unfortunately there appears to be no end in sight during 2022 for significantly above trend wholesale prices. However, if wholesale prices begin to reduce, our system of regulation in NI allows us to act to make sure that reductions are fully passed onto consumers as quickly as possible.

“We are extremely aware of how this further energy price increase will affect consumers in Northern Ireland. We established a working group with the Department for the Economy, Department for Communities and the Consumer Council for Northern Ireland to actively explore what practical measures can be brought forward to alleviate the burden of these higher prices on consumers, this winter. I am pleased that the Northern Ireland Executive has provided significant funding to support local energy consumers.

“I have written to all energy suppliers and reminded them of their regulatory obligations to avoid customer disconnections and consider other approaches to protecting customers in debt. We are also following this up with individual meetings with all energy suppliers, to ensure they are doing all they can to support their customers. I would encourage anyone worried about paying for their energy bill to contact their supplier as soon as possible. There are also a number of agencies who can provide free and independent advice, including Advice NI, Money and Pensions Service and Christians Against Poverty,” said Mr. French.

Raymond Gormley, Head of Energy Policy at the Consumer Council said: “The Utility Regulator forewarned us that energy price rises of this nature will continue because of exceptionally high global wholesale gas prices, however it is never good news for consumers when prices go up. This is going to put extreme pressure on many households as they try to pay their gas bills.

“With the cost of energy continuing to increase, the Consumer Council is concerned about a potential rise in fuel poverty as many families may struggle to find the extra money they will now need to pay for heating.”

Politicians in Derry have called for urgent government action in Belfast and London to protect the most vulnerable of our citizens from what has been branded a cost of living crisis.

SDLP MP Colum Eastwood said: “Almost every household in all of our communities has received a letter from their energy provider informing them of further price rises. People already struggling to keep their heads above water are being hammered by a crisis which neither the Executive nor the British Government has got to grips with.”

Sinn Féin MLA Ciara Fergsuon said: “At a time when living costs continue to rise, global energy prices are spiralling out of control and are crippling ordinary people.

“I am reiterating Sinn Féin’s call on the British government to scrap VAT on energy bills which would immediately cut household costs by five percent.

“They should also introduce a windfall tax on energy generators, like that introduced in other European states, with the money raised being redirected towards tackling fuel poverty and supporting families.”

DUP MLA Gary Middleton said: “The recent £100 Emergency Fuel Heating Scheme has provided some help however the criteria excluded many working families. Those families continually miss out on multiple layers of support when the eligibility criteria is linked to other benefits rather than assessed need.

“Whilst I appreciate that the gas price increase is outside of the Minister for Communities’ [Deirdre Hargey]control, I have written to her, calling for her department to bring forward support to help those affected and to do everything within her power as Minister for Communities to tackle this cost of living crisis. Action is needed now.”

People Before Profit Councillor Shaun Harkin said: “Many people are already struggling to pay energy bills. We’ve spoken to people who have already been forced to cover energy bills with loans and credit.

“Thirty per cent of people and families in Derry live below the poverty line. This will push many more people over the edge, into poverty and into debt. The distress is impacting people’s mental health negatively. Too many people are getting no help at all.

“The response from the Executive has been dismal. We are in a cost of living crisis but they have refused to declare a Hardship Emergency and prioritise putting financial protections in place to stop workers and those with the least from going through the floor.”

Aontú Councillor Emmet Doyle remarked: “OnTuesday Council received a briefing at my request from the Utility Regulator on the high price of gas and electricity. I asked the Regulator if he had been involved with the Department for Communities in planning what kind of support will be needed for people in the long term after he told us that these price hikes could go on for 36 months. It was clear that the Executive are playing catch up with this crisis. The Regulator was clear that a strategy was needed to address this crisis rather than throwing pots of money at it sporadically.”

Firmus has said that any of its customers seeking advice on their natural gas bills or direct debit payments should contact the Firmus Energy Customer Services team on 0330 024 9000. Our telephone lines are open 24 hours a day, 7 days a week. For free and independent advice on how to save energy please contact NI Energy Advice Line on 0800 111 4455.