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Fury over Northern Ireland 'natural' gas price increase
19th March 2004
Northern Ireland gas utility Phoenix Natural Gas, has announced a 20% price increase for residential and small business customers in the province with effect from 1st. April 2004.
The increase has been met with widespread anger and follows a 10.8% increase announced by Phoenix in October 2003. According to the General Consumer Council for Northern Ireland, the increase will cause typical domestic gas bills to rise by up to £170 per annum.
Phoenix has attributed both increases to a rise in wholesale gas costs by its supplier British Gas Transco - a subsidiary of Centrica plc.
Phoenix Business Development Director, Richard Rodgers said "Several months ago, our gas supplier sought to invoke a provision in our contract to increase the cost of our gas. We have been fighting hard in recent months, with the support of the Regulator, to avoid any gas cost increase by our gas supplier and, indeed, have made an application to the High Court. Up until now, Phoenix has borne the risk of any price increase that may result from the operation of the provision in the contract."
Centrica however has been quick to deny accusations of profiteering and has pointed out that all gas supplied to Phoenix is supplied at below prevailing market rates. Further it has been reported by BBC Northern Ireland, that Centrica is actually losing money on the supply of gas to customers in Northern Ireland.
Eleanor Gill, Chief Executive of The General Consumer Council for Northern Ireland said "A second hike in gas bills in the last six months comes as a nasty and unexpected surprise to Phoenix Natural Gas"s 62,000 domestic customers. Both the Council and customers have been kept in the dark about a price issue that has been going on for the last year. Greater openness and transparency is required."
"While we understand that our gas bills are subject to worldwide gas costs, the Council has a real concern that the sheer scale of this increase will undermine consumer confidence in the gas industry at a time when we are committed to encouraging its expansion here."
The rise has also been condemned by local politicians. The Democratic Unionists" Ian Paisley Jnr, MLA spoke for many local politicians when he said "There are 61,000 domestic customers in Northern Ireland typically they will see there weekly bills increase by between £1 - £2 from the April 2004. For some customers this will have a dramatic impact on their standard of living and on their ability to keep warm. Poverty levels will most certainly increase."
"I have today contacted the regulator Douglas McIldoon and asked him to examine the price profiteering by British Gas and to assure us that no additional profits can be slapped onto this 20% increase by the local company Phoenix."
"I have also contacted the boss of Phoenix Peter Dixon and asked him to confirm that he will consider changing his supplier and if all things being equal will reduce this 20% increase to the customer at the first opportunity when his contract with Centrica expires."
Particular concern has been expressed at the likely impact of the increase upon fuel poverty in Northern Ireland - which has amongst the highest levels of fuel poverty of any UK region. In particular, the Northern Ireland Housing Executive has effectively denied many customers a choice, promoting "natural" gas to the exclusion of all other fuels in areas where "natural" gas is available.
