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Last Updated: Friday, 17 September, 2004, 06:20 GMT 07:20 UK
Gas price rise 'unavoidable'
Gas pipes
The increase is part of Phoenix's annual price review
The price of Phoenix Natural Gas is increasing by more than 11% for domestic and business customers from the beginning of October.

Earlier this year, the company dropped controversial plans for a 20% rise in prices which was sparked by a row with its gas supplier.

Phoenix announced its annual price review on Friday.

The company estimates the 11.3% increase averages out at 81p per week, or 42 per year, for the typical household.

Its chief executive, Peter Dixon, said the price rise was unavoidable.

It is our considered view that this is the best deal possible
Eleanor Gill
General Consumer Council
"Following consultation with both the Regulator and the General Consumer Council, the new gas price is the lowest possible price," he said.

The company said the increase was smaller than could have been expected, as it had renegotiated its supply agreement with wholesaler Centrica and reduced the charge paid by consumers for the use of local pipelines.

Eleanor Gill of the General Consumer Council said the increase could have been much worse.

"Following a detailed examination of Phoenix's price review in conjunction with the Northern Ireland Authority for Energy Regulation, it is our considered view that this is the best deal possible," she said.

'Context'

Dermott MacCann, of gas and electricity regulator Ofreg, said: "This price increase must be seen in the context of a significant rise in wholesale gas commodity prices as well as Phoenix moving to reflect the cost rises resulting from a new contract with its wholesale gas supplier."

DUP economy spokesman George Dawson said he was encouraged by new working relationships between Phoenix, the General Consumer Council and Ofreg.

We will keep our fingers crossed and hope that these very high worldwide energy prices we have seen in recent times decrease and then the next time we talk about gas price changes, it will be downwards rather than upwards
Richard Rodgers
Phoenix

"This means that price rises in the future will be subject to full scrutiny and that the long term benefits of the consumer and the company will be protected," he said.

However, SDLP assembly member Alasdair McDonnell said the increase was "too large to be reasonable".

"Its timing is terrible as we face the prospect of water charges and/or rates increases. Neither business nor consumers can afford such sudden swings," he said.

Phoenix business director Richard Rodgers said any price rise was unwelcome but must be seen in the context of worldwide energy prices "which have gone to record highs".

"We have seen the price of Brent crude oil rise to $40 and the price of gas in the world markets brought as close to the price of oil," he told BBC Radio Ulster on Friday.

He added: "We will keep our fingers crossed and hope that these very high worldwide energy prices we have seen in recent times decrease and then the next time we talk about gas price changes, it will be downwards rather than upwards."




WATCH AND LISTEN
Phoenix business director Richard Rodgers:
"Any price rise is unwelcome but must be seen in the context of worldwide energy prices"



SEE ALSO:
Gas deal 'may cut prices'
26 Aug 04  |  Northern Ireland
Gas price hike suspended
08 Apr 04  |  Northern Ireland
Demand to drop gas price hike
23 Mar 04  |  Northern Ireland
Anger over gas price hike
19 Mar 04  |  Northern Ireland
Fuel poverty 'highest in UK'
19 Nov 03  |  Northern Ireland


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