Bernard Durkan (Kildare North, Fine Gael)
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Question 219: To ask the Minister for Communications, Energy and Natural Resources the action, if any, he can take to persuade the gas and electricity authorities to keep prices at the lowest possible level in order to assist economic recovery and alleviate the burden on the domestic market; and if he will make a statement on the matter. [16148/11]

Bernard Durkan (Kildare North, Fine Gael)
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Question 220: To ask the Minister for Communications, Energy and Natural Resources if he will intercede with Bord Gais and the ESB with a view to ensuring that gas and electricity prices here, both to industry and the domestic market, are comparable to other EU States; and if he will make a statement on the matter. [16149/11]

Pat Rabbitte (Dublin South West, Labour)
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I propose to take Questions Nos. 219 and 220 together.

I have no statutory function in the setting of energy prices, whether in the regulated or non-regulated market. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body.

The electricity retail market is now fully deregulated and CER has announced that the small to medium business segment of the gas market will be deregulated from 1 October next. Business and domestic customers can increasingly avail of the competitive offerings from a number of electricity and gas supply companies. The first step that customers should take to reduce their energy costs is to work actively in securing better value offers in the market and in switching to suppliers delivering lower prices.

I acknowledge the action taken over the last two years to bring Ireland's energy prices into line with, or below, European averages. This is resulting in positive outcomes as is evidenced by improved competitiveness in the gas and electricity sectors when compared with other European countries.

Eurostat data for the first half of 2010 showed such convergence to the EU average for many categories of business and residential consumer in both the electricity and gas sectors. Analysis by the Sustainable Energy Authority of Ireland (SEAI) shows that average residential gas prices for the majority of Irish gas consumers went from being 4% above the EU average at the end of 2009 to being 5% below the average in the first half of 2010.

SEAI analysis of Eurostat data for the electricity sector show that in the 12 months to June 2010, Ireland experienced the largest fall in business electricity prices in the EU for medium to large consumers. Prices for these consumers fell by 20% to 36%, depending on consumption levels.

Electricity prices for business in Ireland were below the EU average for medium to large customers for the first half of 2010. For the group of businesses consuming the largest amount of electricity and for which we have data, Ireland was 27% below the Eurozone average. For business customers consuming smaller amounts of electricity Ireland was ranked between 5th and 12th in Europe out of 27 countries for the same period.

Competition helps to put downward pressure on energy prices. But the focus must be kept on all possible additional actions to mitigate costs where possible for business and for domestic customers. This is essential for competitiveness, for employment and for economic recovery.

This convergence to the EU average has been an important factor in supporting greater competitiveness for Irish enterprise and foreign direct investment. Global gas and oil prices have risen sharply since the start of the year driven by events in North Africa and Japan and high demand from the emerging economies of China and India.

Markets and analysts are forecasting that international oil and gas prices will rise further over the coming months. The Energy Regulator, Bórd Gais Eireann, ESB and other energy suppliers consider that such increases will have an impact on domestic gas and electricity prices. Ireland is a price taker in the global fossil fuel market and the economy is therefore vulnerable to energy price fluctuations and price rises. Competitor countries are in many instances facing the same prospect and the objective in the context of higher global prices must be that we retain or improve our competitive position.

Ireland's concerns about high oil and gas prices are shared at EU level and fellow Member Countries of the International Energy Agency (IEA). The EU and IEA agree that high fossil fuels prices which pose a threat to economic recovery underline the need to reduce dependence on fossil fuels by radically enhanced energy efficiency measures and the development of renewable energy.

I am committed to working with the energy sector to ensure that the costs of energy for are as competitive as possible through those measures at our disposal including notably a sustained focus on energy efficiency.