Sinn Féin economy spokesperson Mitchel McLaughlin

Gas and electricity prices: Massive hikes to hurt poor

The price of being poor

The news that two of the major energy suppliers in the North, Phoenix Gas and Northern Ireland Electricity‚ have increased the costs of their products substantially has exposed the greed of both companies.

On Thursday 19 January Phoenix Gas announced a massive 17.3% hike, coupled with a 30% increase in prices announced in October last year, this second increase will see consumer bills soar by 52% or an average increase of £200 in just four months.

Within a week of the Phoenix announcement the North's electricity supplier Northern Ireland Electricity (NIE) announced a double digit rise in electricity prices to come into effect in April.

Gas in the Six Counties is now two thirds more expensive than in Britain where British Gas has opted to shield its customers from severe price hikes. Phoenix Gas is blaming record high wholesale gas costs for the hike with its Chief Executive Peter Nixon saying that since the company's review in October 2005, gas costs have risen significantly and have almost doubled since the same time last year.

But while Phoenix Gas has passed the increases on to their customers, British Gas took a different view. Mark Clare, CEO of British Gas said that when wholesale gas costs rose by 40% they passed only 17% of the wholesale increase on to consumers.

More expensive than oil

Energy costs, which include electricity, gas and other fuels, for consumers in the Six Counties means they are paying almost 40% more than for those in Britain.

Oil prices have gone down by 6% since 20 September 2005 while Phoenix Gas prices have gone up by 52% since 1 October 2005.

Currently oil prices and Phoenix Gas prices are comparable. However, with the increase of 17.3% in Phoenix Gas prices their product will become more expensive than oil.

As well as being dearer than prices in Britain customers in the Six Counties will also be paying over 20% more than those in rest of Ireland.

Bord Gáis increased their prices by 25% from 1 October last year and there have been no other increases in gas prices in the 26 Counties from 1 October 2004. Bord Gáis have no plans to increase their prices until they carry out their next annual review in the summer of 2006.

Speaking to An Phoblacht Sinn Féin economy spokesperson Mitchel McLaughlin described the latest price rise as a "severe blow to gas customers" and accused the company of "abusing its monopoly position".

"The announcement, by Phoenix Gas, that it is to increase prices by a further 17.3% means that consumers have been hit with a massive 52% increase in the last four months.

"This will create particular difficulties for those already experiencing fuel poverty and people on fixed incomes. The North of Ireland already has the highest levels of fuel poverty in Britain and Ireland as it stands and the latest increase will only exacerbate that intolerable situation," McLaughlin said.

Hardship

Pat Austin, from the pressure group, National Energy Action said the price rise would bring hardship to many families and claimed that a recent survey had indicated that more than one third of Phoenix customers earned less that £7,000 per year. "Quite clearly all those people are going to be affected. Some people will be making decisions between heating and eating," he said.

In a further blow to consumers in the Six Counties, Northern Ireland Electricity (NIE) announced a price rise.

Pressure is mounting on the electricity supplier to rethink a planned double digit hike in prices.

Electricity prices could rise by up to 20% which the company is blaming on rising gas prices.

Commenting Mitchel McLaughlin said it was time for the British and Dublin Governments to invest in a long term strategy of providing energy through renewable and environmentally friendly means. "Ireland is a small country of some five to six million people and we are capable of meeting all our energy needs in a variety of ways. We need to explore alternative energies such as wind, solar or wave power. In doing so, we could not only lower and protect the price of domestic energy to households but could encourage manufacturers to set up business on this island."