Consumers in Northern Ireland in the grip of the worst energy price shock since the 1970s

INCREASING costs have left the average northern consumer paying £ 1,000 more for energy than last year, amid the worst price shock since the 1970s.

Northern Ireland’s utilities regulator has warned that soaring wholesale gas prices mean national gas bills could rise by 50%, or £ 300, this winter, with electricity bills set to rise by 20 %.

Heating oil, used by two-thirds of northern households, is also at a three-year high after doubling in one year.

The Consumers Council said a 20% increase in road fuel since last year could leave some households with oil burners and with longer commutes, more than £ 1,200 less this year than 2020.

Energy providers have already announced several price increases in 2021.

Firmus Energy and SSE Airtricity increased their gas prices by 35% and 21.8% in early October.

It was based on the wholesale price of gas at the end of August.

Some electricity providers have already increased their tariffs three times in 2021.

But wholesale natural gas, which accounts for about 50 percent of gas tariffs, has risen 109 percent since then, in a perfect storm of market forces that sparked a global energy crisis.

Energy companies can trigger a price increase if their wholesale costs increase by more than five percent.

Utilities regulator John French has warned that gas and electricity companies could do so as early as December 1 in an attempt to absorb rising costs.

Constraints on Europe’s gas supply from Russia are the main driver of the recent surge, while increased competition with Asia and South America has also resulted in greater pressure on markets. price.

The cost of coal and crude oil also skyrocketed in 2021, generating increased demand for gas.

“With such a volatile market, it’s really hard to predict how long gas prices will stay high,” French said.

“But due to these record global prices, we expect to see significant upward pressure on bills through the summer of 2022.

“As wholesale costs represent about half of our gas and electricity bills, I unfortunately see further significant increases in household and business energy bills in the coming weeks. “

Companies, which typically have energy contracts that fluctuate with wholesale costs, are already experiencing massive cost spikes.

Fermanagh-based glass maker Encirc, which also operates from England and Italy, said its energy costs could rise by £ 60million this year.

The utilities regulator said there were no immediate signs of wholesale energy prices returning to normal levels anytime soon.

“In the event of a drop in wholesale energy prices, our regulatory system in Northern Ireland allows us to act to ensure that the reductions are fully passed on to consumers as quickly as possible,” said Mr French.

Peter McClenaghan of the Consumers Council said the pressure on household budgets continues to increase dramatically.

“These are worrying times for consumers, as these fuel price increases are due to factors beyond their control and coincide with rising inflation, proposed tax hikes and rising food costs. “

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