THE news that gas prices are to go up has been greeted with dismay from charities.
Manx Gas announced on Wednesday that natural gas tariffs will increase by 8.2 per cent (0.54p a unit) and the cost of Liquid Petroleum Gas will rise by 6.4 per cent (0.64p per unit) from Thursday next week, putting annual bills up by at least £50.
Age Isle of Man chief executive George Quayle said: ‘Any increase is disappointing but this seems to be a huge increase to say the least. Many people had hoped the advent of natural gas would bring prices down but the reverse seems to be the case.
He said: ‘For older people and those on fixed incomes, particularly pensioners, hardship is inevitable. It’s going to be a major proportion of their budget that’s going to have to be spent on energy.’
He added: ‘There’s no doubt it will be a blow to many pensioners who are having to face increases in their energy bills when other costs are rising at the same time and income is in fact falling.’
Anita Ardern, chairman of the Douglas Coal Fund, which gives fuel vouchers to those in need in the Douglas area, said: ‘The increase in gas prices will undoubtedly mean more households will have difficulty in maintaining an adequate heating regime.’
Mrs Ardern said the fund, which currently supports about 300 households, may see an increase in requests for help as a result of the rise, but added: ‘There may be people who would benefit but don’t have the courage to ask for assistance.’
Treasury Minister Eddie Teare MHK said the announcement was ‘certainly unwelcome’, but added: ‘The immediate impact on the Retail Price Index [inflation rate] is very small. We anticipate it will be 0.17 per cent.’
The price rise will cost the average domestic natural gas central heating customer an additional £54 a year, based on 10,000 units consumed.
And it will cost the average LPG central heating customer, again based on 10,000 units consumed, an extra £64 a year.
There will be no increase in the standard charge payable by all gas customers, which remains at 15.477p a day, including VAT.
Manx Gas commercial director John Davies said: ‘The decision to increase tariffs has been taken very reluctantly but is one that has been forced upon us as a result of further global increases in wholesale energy prices.
‘Both propane and natural gas prices are forecast to stay at these high levels for the foreseeable future.’
He added: ‘Manx Gas will continue to review feedstock prices throughout the coming months to ensure all tariffs remain reflective of market wholesale prices.
‘Both downward and upward movements are possible as the market forecasts do not always prove accurate.’
Manx Gas has about 15,000 customers on natural gas and about 8,000 on LPG.
Manx Gas last increased its prices in August 2011. There was a 0.3p per unit increase in natural gas tariffs, while the cost of LPG rose by 1.12p per unit for metered tariffs, mini bulk and cylinder tariffs.
The Office of Fair Trading has been informed of the new tariffs. Chairman David Quirk MHK said: ‘Whilst the OFT is not a regulator it will continue to look carefully at the profitability of the local energy markets and in particular ensure that suppliers are not enjoying excessive profitability at the expense of Manx consumers.’
• Inflation fell in the island for the seventh month in a row in March.
The annual rate of inflation as measured by the Retail Prices Index (RPI) continued to fell to 3 per cent, its lowest figure since November 2009.
Petrol and diesel prices in the island are at an all-time high.
As the Manx Independent went to press, a litre of unleaded fuel cost 149.9p and diesel was 152.9p per litre at the Total service station and Manx Petroleums Milestone garage, both on Peel Road, Douglas.
Electricity prices were frozen for two years after the government agreed a £14.5 million bail out of the Manx Electricity Authority.
The financial support – to be funded from government’s capital programme – was approved by Tynwald as part of the 2012/13 Budget.
Without it, the MEA would have to increase electricity prices by about 10 per cent over the period to 2013.