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Last Updated: Thursday, 8 April, 2004, 14:29 GMT 15:29 UK
Gas price hike suspended
Gas pipes
Phoenix Gas increased its prices from 1 April onwards
Phoenix Gas has agreed to suspend a 20% price hike it announced for customers in Northern Ireland.

The move follows a meeting between the company and government ministers.

There had been widespread criticism of the price rise, which came into effect on 1 April.

It is not known how long the suspension will last.

The announcement, made on Thursday, means Phoenix will agree to the suspension "for a period in the interests of consumers".

The firm explained the "difficulties they faced" at the meeting with Enterprise Minister Barry Gardiner.

Mr Gardiner is set to have discussions with Centrica and has asked Phoenix to "press ahead with their long term licensing renegotiation" with the Northern Ireland Authority for Energy Regulation (NIAER).

This is crucially important for gas consumers and the further development of the industry
Minister Barry Gardiner

"This is welcome news for consumers and for the gas industry in Northern Ireland," said the minister.

"I am delighted that Phoenix has now helped to create a window of opportunity within which we can address all of the issues facing the gas industry. We now need to find solutions for both the current price increase and the long term licensing renegotiation issues.

"This is crucially important for gas consumers and the further development of the industry.

"In seeking to achieve this, I will also be meeting with Centrica to impress upon them that the initial agreements to allow the establishment and development of the gas industry in Northern Ireland need to be honoured in full; both the spirit and the letter of them."

'Strongly criticised'

A Phoenix spokesman said: "To facilitate the Minister's meeting with Centrica, Phoenix has agreed to suspend its price increase for a short period.

"Phoenix will be writing to all 68,500 customers personally, to fully inform them of developments."

Thursday's meeting was between Mr Gardiner, his predecessor Ian Pearson, Sir Gerry Loughran, Chairman of Phoenix Natural Gas, Phoenix chief executive Peter Dixon, and Phil Holder, Managing Director of East Surrey Holdings plc.

The General Consumer Council said the announcement was "great news for local customers".

Chief Executive Eleanor Gill said: "The time available will allow all parties to work together to restore confidence in the gas industry.

"The council also welcomes the move by Phoenix Natural Gas to provide everyone with this much-needed space."

The 20% price hike had been strongly criticised by NIAER.

It meant the company's gas prices have risen by a total of almost 31% since last October.

Last October, Phoenix Gas was widely criticised for a rise of almost 11% in bills for domestic and small business customers.

The company blamed its last price rise on an increase in the wholesale price it had to pay for gas.

Phoenix and its gas supplier Centrica have been involved in an argument over the proposed rise in price for months and court proceedings are currently under way.

BBC NI's James Kerr:
"The move follows a meeting between the company and government ministers"

BBC NI's Ita Dungan:
"Two weeks ago the industry's regulator OFREG called on Phoenix to delay the rise"

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