The Utility Regulator today said that rising international wholesale fuel costs are the reason for a 39.1% increase in gas prices announced by Phoenix Supply Ltd today. The price increase applies from 1 May for Phoenix Supply Ltd customers in the Greater Belfast area.
Commenting on the gas price increase, Utility Regulator Chief Executive, Shane Lynch said:
“Clearly this is very bad news for many consumers in the greater Belfast area in these difficult economic times. We regret having to approve any price increases and are conscious of the impact this will have on household budgets in Northern Ireland. We carefully scrutinise all price rises to ensure that the maximum tariff Phoenix Supply Ltd can charge is justified. This increase is wholly attributable to rising wholesale gas costs.
“Wholesale fuel costs are the single largest component of the gas prices paid by consumers. In recent months wholesale fuel costs have been volatile, influenced largely by events in Japan and Libya. Prices for the forthcoming winter are 77% higher than for the previous winter. The increase in wholesale costs is directly responsible for the gas price rise announced today”.
Looking ahead, Mr Lynch made a commitment:
“Setting prices is a two way street. Our commitment to gas consumers is that we will act as soon as possible, should wholesale fuel costs decrease, to make sure this reduction is quickly reflected in their bills”.
While Phoenix Supply Ltd prices have been among the cheapest in the UK over the last 18 months, the increase announced today brings bills back to levels last seen in May 2008 - when there was also extreme volatility in wholesale fuel costs.
Consumers in the Greater Belfast area can also now choose between two different gas suppliers. The Utility Regulator has been working to remove barriers to market entry and welcomes the competition and choice this has brought for consumers”.
ENDS
Notes to Editors
1. The Utility Regulator is the non-Ministerial Government Department responsible for regulating the electricity and gas industries and water and sewerage services in Northern Ireland.
2. A Q and A answering key questions on the announcement and a briefing paper explaining gas tariffs are included here.
3. For further information please contact Barbara Stevenson on 028 9031 6343 or 07794 965922