Bertie Ahern (Dublin Central, Fianna Fail)

The prices that came into force on 1 October this year, including the 33.8% increase, will be fixed for one year until 30 September 2007. The Commission for Energy Regulation will review prices again during the summer of next year for the gas year starting on 1 October 2007. Under the Gas (Interim) (Regulations) Act 2002 responsibility for the regulation of tariffs is delegated to the CER, which has responsibility for ensuring market stability, encouraging new market entrants and ensuring tariffs are cost-effective and do not discriminate unfairly between licensed operators in the State sector, such as ESB or Bord Gáis, and those in the private sector. There is no need to rehearse all the issues dealt with in its decision.

Following a long price freeze from the mid-1980s onwards Bord Gáis has been able to sustain relatively low prices, in part due to favourable long-term hedging contracts, resulting in a very low average cost of gas relative to the price. The effect of the proposed increases of 33.8% on the CPI figures is 0.164%. I do not think increases in gas prices of that order will drive anyone out of the country.

The proposed increases in gas tariffs and electricity prices are practically the same. Some of the largest suppliers in the UK have also faced significant price increases. Npower has experienced rises of 30.8%, Scottish Power has averaged 34.6%, as our friends in the Gallery will know, and Powergen has experienced an increase of 24.4%. The CER has published its draft decision on the average price increase of 19.7% for ESB customers, to come into effect on 1 January 2007, one of the contributors to which is the cost of gas. While the price fluctuates the regulator takes the price over the full period and not just a few weeks.

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