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Last Updated: Thursday, 19 January 2006, 12:55 GMT
Gas firm under fire over prices
Gas pipes
Phoenix gas announced a 17% prise rise
Phoenix Natural Gas has come under fire for increasing its prices for the second time in four months.

The company said its tariff will rise by 17% and blamed the soaring price of wholesale gas for the increase.

It comes on top of a 30% rise announced in September, prompting a call for the gas regulator, Ofreg, to take action.

Ofreg said it was not surprised by the rise but the General Consumer Council said it was "appalling" and a "severe blow" to customers.

The price rise will come into affect on 23 January and apply to more than 90,000 Phoenix Natural Gas customers in Northern Ireland.

Peter Dixon, Chief Executive of Phoenix Natural Gas, said the company was experiencing record high wholesale gas costs.

But he said the company realised it would be unwelcome news for customers.

"Since our last tariff review in October, gas costs have continued to rise significantly. For example, wholesale gas costs in December were more than double those of twelve months earlier," he said.

Are we facing the bizarre situation where someone in Belfast will pay so much more for gas than someone in Ballymena?
Wesley Henderson
General Consumer Council

"This increase is a direct pass through of gas costs to customers."

The second rise means an average annual bill will soar by 52%, or 200, in four months.

Wesley Henderson of the General Consumer Council questioned the justification of Phoenix Natural Gas price increase.

He said the gas supplier, Firmus, had confirmed that customers in Ballymena, County Antrim, and beyond would pay less for gas than Phoenix customers in Belfast and that prices will be capped for two years.

"Are we facing the bizarre situation where someone in Belfast will pay so much more for gas than someone in Ballymena?," he said.

"If all gas companies are experiencing the same high cost of wholesale gas, surely Phoenix could at least match this move by Firmus and bring prices into line for all Northern Ireland gas customers."

Mr Henderson said Phoenix customers had been "left reeling" at the extent of the increase and "fearful" of further rises.

However, Dermot MacCann of Ofreg said both recent price increases had been driven by "unprecedented rises" in wholesale gas costs.

"Raw wholesale gas costs now represents over 62% of the costs that Phoenix consumers see in their final bills and unfortunately it is therefore not surprising to see this sort of significant price rise coming through here," he said.

Fears have been expressed about an increase in fuel poverty

"Ofreg will continue to work with Phoenix and its owners, the General Consumer Council and relevant government departments to ensure that gas costs are kept as low as possible."

Pat Austen, from the pressure group, National Energy Action, said the price rise would bring hardship to many families.

She said a recent survey had indicated that more than one third of Phoenix customers earned less than 7,000 per year.

"Quite cleary all those people are going to be affected. Some people will be making decisions between heating and eating," she said.

Alliance assembly member Sean Neeson urged the regulator to take "urgent action" to stop the latest price rise.

"This is a clear case for it to take strong action on behalf of the consumer, and ensure those who have taken the risk on natural gas are not left with continuing spiralling prices," he said.

North Belfast MP Nigel Dodds of the DUP said: "I am concerned that no effort appears to have been made by Phoenix Gas to cushion the blow by seeking to absorb the rise in wholesale gas themselves at least for a period," he said.

"This latest rise will cause more people to fall into the category of the fuel poor. "

Sinn Fein assembly member Mitchel McLaughlin said the rise was a "severe blow" to gas customers.

"This will create particular difficulties for those already experiencing fuel poverty and people on fixed incomes," he said.

SDLP assembly member Sean Farren also condemned the price rise.

"While it is true that wholesale gas prices have increased dramatically over the past year, this latest hike of 17.3% by Phoenix will cause severe hardship on families at the height of winter when demand for the service is at its peak," he said.

Ulster Unionist Roy Beggs junior described the rise as a "hammer blow" to consumers.

"Gas in Northern Ireland is now two thirds more expensive than in England. British Gas have managed to shield their customers and consumers in the Republic of Ireland are also protected," he said.

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