06/09/2011

Wholesale Market 'Forces Gas Price Rise'

The gas supplier, firmus energy - that has been providing natural gas since 2005 across Northern Ireland - has announced details of its new tariff, which will see domestic prices increase by 28.4% from 1st October.

All areas outside Belfast are to be hit by the price rise, being only the second time firmus energy has needed to raise prices in almost six years - as a result of dramatic rises in the wholesale cost of gas.

The new price equates to an increase of around £2.64 a week for the majority of its ten towns domestic customers.

Mark Prentice, Managing Director of firmus energy (pictured) said: "Since we first started supplying natural gas to homes and businesses in 2005, we have worked hard at keeping our prices as low as possible.

"We were one of the very few natural gas companies in the United Kingdom not to increase our prices over the last 12 months, during which other energy suppliers across Great Britain and in Northern Ireland have announced dramatic increases, in some instances of nearly 40%.

"It is regrettable that we cannot continue to buy gas on the wholesale market at the same levels as last year and as a result have had to increase gas prices.

"That said, natural gas continues to be the lowest cost fuel for homes across Northern Ireland - even after our planned increase in October, firmus energy natural gas prices will still be on average 27% cheaper than current home heating oil prices.

"This differential could help deliver savings of almost £226 per year for an average sized home using natural gas compared to oil. Customers can also be reassured that our price from 1st October will be fixed for a period of at least 12 months, allowing them to budget with confidence," he said.

"In January 2009, we introduced our unique price commitment to our customers that we would continue to review our prices to ensure natural gas from firmus energy would remain cheaper than oil," he continued.

"We understand that particularly in today's cost conscious climate, it is important for consumers to continue to know that they've made the right decision to switch to natural gas.

"We use an independent research company to check local oil prices every week and, at our next tariff review in September 2012, we will ensure that our price for natural gas will be cheaper than oil based on average oil prices between now and then."

Mark Prentice continued: "In the last 12 months, the price of oil per litre has increased by around 30%. In September 2010 the average cost of 900 litres of oil would have cost £398.50. However, a year later the same 900 litres now costs, on average, £531.50.

"Not only that, but because the oil price fluctuates daily, it can be difficult for customers to budget for their home heating.
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"One of the many advantages of natural gas is that you only have to pay for the gas you use and do not have to find a large sum of money in advance.

"Many of our customers also opt for a pay-as-you-go meter which works in the same way as a mobile phone top up card, allowing you to pay for your gas as you go along.

"Also, because gas is piped directly to your home, it eliminates the risk of running out, deliveries not able to reach you during snow or ice or the possibility of having oil stolen from your tank.

"We recognise that this increase is difficult for all natural gas users coming into next winter, particularly our most vulnerable customers.

"With that in mind we have introduced a new scheme, in conjunction with Bryson Energy, which will offer additional support for our older customers and those with disabilities.

"Customers registered for the firmuscare+ scheme will be offered free and impartial energy advice, including help on how to use their heating system efficiently, a review of their current energy bills and referral to any energy efficiency schemes for which they may be eligible.

"They will also be offered a benefit entitlement check to ensure that they do not miss out on any benefits to which they may be entitled.

"Therefore, firmuscare+ customers will be contacted in the next few weeks about this new scheme," he concluded adding: "Any customer looking for advice on their natural gas bills or their direct debit payments going forward can contact our Customer Billing team on 08456 05 00 88."

All customers in Londonderry, Limavady, Coleraine, Ballymena, Ballmoney, Antrim, Banbridge, Craigavon, Armagh and Newry are being hit. This does not apply to the licenced area for greater Belfast.

Fuelling Poverty

The Alliance Enterprise Spokesperson Trevor Lunn MLA has said that the gas price rise for towns outside Belfast could has very serious implications as regards fuel poverty after firmus said it will increase its price in towns in serves outside Belfast by 28.4% for domestic customers from 1 October.

"This is a troubling development and it comes on the back of bad news as regards prices from Power NI and forecasts about rises in the price of coal.

"This gas price rise could have a very serious impact in relation to fuel poverty in the towns that will face this price change and the increase will hit households very hard.

"We need to look at innovative ways of trying to keep energy prices low like further promotion and use of renewable energy and home insulation schemes," he said.

"There is a worrying trend of energy price rises and I believe that joined-up action at Executive level is essential to address this problem and tackle fuel poverty head on."

See: Report Highlights NI Fuel Poverty

(BMcC/CD)

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