Shane McEntee (Meath East, Fine Gael)
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Question 15: To ask the Minister for Communications, Energy and Natural Resources the level of price reduction consumers can expect from regulated gas prices in September 2009; and if he will make a statement on the matter. [24187/09]

Eamon Ryan (Dublin South, Green Party)
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The Commission for Energy Regulation (CER) reduced gas tariffs by 12% from May 1st, following completion of the review of regulated tariffs, which I requested in February last. The Commission's decision on gas tariffs reflects much lower gas costs than forecast, exchange rate developments, and increased sales during the particularly cold winter months.

This CER pricing decision brought forward price reductions, which would otherwise have to take place in October of this year. The CER is undertaking its usual annual review of domestic tariffs in the coming weeks informed by a tariff submission from BGE. The prospect of any further gas price reductions next October will be determined primarily by wholesale gas price trends and gas demand over the coming months.

The reduction last month in regulated gas prices was less than the overall fall in wholesale prices, because the CER took steps to ensure that when international gas prices increased exponentially in 2008, consumers were not overly exposed to intermittent gas spikes.

In taking this approach, the CER took account of the emerging difficult economic situation and the potential impact of high price increases on business and consumers, including vulnerable customers. This approach meant that when fossil fuels were rising very significantly in early and mid-2008 the CER decided to implement an increase of 20% in the cost of gas. When the CER made this decision, the wholesale gas price had more than doubled in the previous 12 months.

I would point out that the CER has exited from the regulation of tariffs for large energy users. In that sector around 88%, in volume terms, of business has switched to the independent gas suppliers.

For those commercial customers on variable tariffs the substantial reductions in wholesale gas prices are already being reflected in their tariffs.

It is the case that energy costs have been of concern to enterprise for a number of years. This concern has been exacerbated by the economic downturn and the overall serious challenges facing business. I have made it consistently clear that all possible action that can be taken must be taken to reduce energy costs for the enterprise sector. Energy policy actions are focussed on mitigating those costs where possible. My Department is actively engaged on the energy costs issue with all relevant players, including the CER, Bord Gáis Éireann, the independent suppliers and the enterprise sector itself.

I have no direct role in the setting of gas prices, whether in the regulated or non-regulated sector. My policy objective is to secure sustainable and diverse energy supply at least cost for Irish business and consumers. The Government's comprehensive range of energy policy actions are designed to deliver this objective. They include optimising all possible energy efficiency gains by industry and by householders.