Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

Responsibility for the regulation of the retail electricity and gas markets is a matter for the Commission for Energy Regulation, CER, which is an independent statutory body. Prices in the electricity retail market are fully deregulated and similarly for gas, except in the case of Bord Gáis Electricity, BGE, tariffs for domestic consumers. Customers can therefore avail of competitive offerings from electricity and gas suppliers. Prices are set by suppliers and are commercial and operational matters for them. I do not have a statutory function in the setting of electricity or gas prices.

Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the cost of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and low population density. Global gas and oil prices are by far the most significant factor. Prices have risen sharply since the start of 2011, driven by events in the Middle East, north Africa and Japan and the significant growth in demand from China and India. Ireland is at the mercy of international fossil fuel prices, which dictate the retail price of electricity.

At a national level, the competitive energy market in place helps put downward pressure on prices. In addition, we must focus on all possible additional actions to mitigate costs for business and domestic customers, including rigorous regulatory scrutiny of the network costs component of retail prices.

I am committed to working with enterprise and with the energy sector to ensure that the costs of energy are as competitive as possible. In this context, promotion of energy efficiency measures is an area within our control where action can be taken to reduce energy costs.

Additional information not given on the floor of the House

Energy efficiency represents a significant opportunity for both businesses and households to reduce their energy costs. There are energy efficiency measures in place to assist both business and domestic energy consumers, with significant funding allocated to them. The energy efficiency fund, which I announced in February and which will commence funding specific measures in the near future, will assist energy efficiency projects in the public and commercial sectors.

Promotion of indigenous sustainable sources of energy will help off-set the impact of volatile fossil fuel prices. The Government has a target of 40% of electricity being generated from renewable sources envisaged by 2020. Good progress has been made in meeting this target and its realisation will introduce more certainty in the energy fuel mix as well as boosting security of supply.

The latest analysis of EUROSTAT data on electricity and gas prices is presented in SEAI's published report on electricity and gas prices in the period January to June 2012 and is publicly available. The price statistics are presented for different business consumers, differentiated by consumption level.

The report shows that VAT-exclusive electricity prices increased for small business by 3.1%, and for medium business by 1.8% over the previous six months. By contrast, the very smallest business users saw a price decrease of 6.7%. Prices for the three categories of business consumers range from 4th to9th most expensive in the EU, and these rankings have not changed significantly since the previous six months. The effects of the price drivers outlined earlier in this response tend to place Irish electricity and gas prices towards the more expensive position in the EU rankings.

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