Bord Gáis has piled pressure on the Government just at a moment when it is being urged to step away from the flat-rate energy supports that have insulated customers from some of the worst of the energy crisis in the wake of wars in Ukraine and the Middle East.
Owned by UK group Centrica, the utility is one of the largest players in the State’s residential energy market, supplying gas to 300,000 households and electricity to an even greater number.
The decision on Wednesday to announce increases of around about 10 per cent in domestic energy supplies puts the squeeze on Minister for Finance Simon Harris and Minister for Public Expenditure and Reform Jack Chambers as they finalise their budget measures. The increases – which will add about €300 to the average annual costs of customers – will kick in on October 9th, just three days after the budget.
The Government, which has been criticised over a series of across-the-board energy supports in recent years, has been looking to face down demands for a return of energy credits to help households defray increased energy costs.
It is also under pressure from both sides of the debate on whether to activate increases in carbon tax deferred last year and to press ahead with further scheduled increases in that area.
Excise cuts on fuel were extended once again recently and the VAT cut on energy bills has already been extended out to 2030, all of which limits the Government’s room for manoeuvre.
Bord Gáis is practically the last of the big players to announce increases in energy costs over recent months. Electric Ireland was the first to move in May, followed by Yuno, Prepay Power, Flogas and, most recently, SSE.
Only Energia, which was acquired earlier this year by French private-equity group Ardian, has yet to increase its prices. It was this time last year that it last raised rates so it would be no surprise to see another increase announced in the coming days, adding to pressure on the Government in advance of the budget.
Bord Gáis stressed that this was the first time it had raised gas prices in four years. But it is stretching credibility to suggest the utility was not fully aware that a significant price increase at this time would create a clamour from consumers and a headache for Ministers this close to budget day.