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Last Updated: Thursday, 22 September 2005, 05:20 GMT 06:20 UK
Gas users face major price rise
Gas pipes
Consumer watchdogs admitted the price rise was inevitable
Gas customers in Northern Ireland are to face a price increase of almost 30% from 1 October.

Phoenix Natural Gas blamed rising world energy prices for gas costs which, it said, were "unprecedented".

The Consumer Council said an "urgent package" was needed to protect vulnerable users over a price rise that is "10 times the rate of inflation".

It accepted that the increase, which will add an extra 130 a year onto average bills, was inevitable.

Consumer Council director of energy Wesley Henderson said the increase of 29.9% would be "particularly devastating to the one in three households here that suffer from fuel poverty".

This is a bleak period for gas prices
Wesley Henderson
Consumer Council
"Exceptional times call for exceptional measures," he said.

"Low temperatures trigger special payments from government for consumers: unprecedented price increases should also trigger special payments for vulnerable consumers.

"For example, although every older person here gets a winter fuel payment of 200 per year, it will not be enough to cover the cost of keeping warm."

Mr Henderson said the council accepted the price rise reflected the cost of buying gas on the open market, which is subject to international upward price movements.

"This is a bleak period for gas prices and at this point in time, no-one can be certain when things will improve for customers or that there will be no further movement in gas prices this year," he added.

'Energy efficient'

Phoenix Gas's corporate affairs manager Sharon Hearty said the wholesale cost of gas had risen by 60%.

She said the company would be spending about 20m more than last year for wholesale gas.

"We continue to ensure that the cost that our customers are paying and that we have to pay for gas is the most competitive in the market place," she said.

We are content that the price they are now paying for gas is the price they are being forced to pay at the market
Kevin Shiels

"To put it into context, the home heating oil market has seen an increase in the last year of around 40%, in the last years, it has doubled in terms of cost and I think that sets the context for overall world energy prices."

Ms Hearty said that even after this increase, oil home heating would still be at least 10% more expensive than gas.

She added that Phoenix Gas supported the General Consumer Council's call for government action.

Energy regulator Ofreg said it was "content that the rise is appropriate".

Raw wholesale gas costs represented more than 50% of the costs that Northern Ireland consumers see in their final bills, it said.

Ofreg's Kevin Shiels said it was "a large rise and will be felt by gas consumers - particularly those who find it hard to pay their energy bills".

"Unfortunately we live in a time of very high and volatile international gas prices and national gas prices.

"The impact of those is what is now being felt by Phoenix Gas in the Belfast market."

He added: "Phoenix are now moving to a position where they will pay market prices for their gas under Centrica. Those market prices are set in an international and national context.

"We are content that the price they are now paying for gas is the price they are being forced to pay at the market. They have renegotiated that contract with Centrica and we are happy that is what is being delivered through to Northern Ireland customers."

The regulator has powers to enforce price controls on Phoenix, but said it has not yet felt the need to use those powers.

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