Catherine Murphy (Kildare North, Independent)
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Question 36: To ask the Minister for Communications, Energy and Natural Resources his views on whether international energy prices are set to inflate dramatically over the coming decade; if the information provided by the International Energy Agency is being factored into policy responses; the new responses that he believes are required to ensure energy security and affordability; and if he will make a statement on the matter. [15717/11]

Pat Rabbitte (Dublin South West, Labour)
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In recent months wholesale oil and gas prices have been trending upwards. There are concerns in the markets that oil prices will continue to rise in the months ahead. As oil prices rise, European wholesale gas prices, which lag oil prices by about six months, are expected by the markets to rise during the last quarter of the year.

Prices are being driven by geopolitical events in the Middle East and North Africa coupled with high demand in the developing economies. Other factors include the knock on impact on gas prices of the need to replace nuclear energy in Japan and Germany. It is also of concern that the recent meeting of OPEC concluded without agreement to increase either production quotas or actual production.

Ireland is a founder member of the International Energy Agency (IEA). National energy policy directions are fully informed by the IEA's ongoing analysis and data. The IEA's report on gas published earlier this month examines the key factors that could result in a more prominent role for natural gas in the global energy mix and the implications for other fuels, energy security and climate change.

The IEA also concludes that natural gas can help improve energy security and when replacing other fossil fuels can lead to lower carbon emissions.

Ireland has a high dependence on natural gas for power generation and the market is vulnerable to price volatility.

The focus of Government policy is on delivery of strategies to ensure the provision of secure, sustainable and competitive energy supplies, framed against the continuing back drop of volatile fossil fuel prices. Among key strategies to mitigate gas dependence are facilitating investments in major infrastructure, increasing the contribution of renewables and enhancing energy efficiency. Bringing Corrib gas ashore is also a vital component.

As regards mitigating measures, energy efficiency and consumer engagement remains the most cost-effective means of consumers reducing exposure to energy price rises. The most immediate step that electricity and gas customers can, and should, take to keep downward pressure on prices is to engage actively with suppliers in the market. In so doing, they may secure better value offers and/or lower prices from their existing or alternative suppliers. Improving the efficiency of their energy usage will deliver demonstrable savings and make their energy costs more affordable in the longer term. The Government has put in place a range of energy efficiency incentives to assist in this regard.

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 39: To ask the Minister for Communications, Energy and Natural Resources the steps he will take to reduce the costs of utilities for struggling businesses in order to help restore economic competitiveness. [14238/11]

Timmy Dooley (Clare, Fianna Fail)
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Question 50: To ask the Minister for Communications, Energy and Natural Resources the steps he has taken to ensure that the energy market here is competitive; and if he will make a statement on the matter. [15945/11]

Pat Rabbitte (Dublin South West, Labour)
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I propose to take Questions Nos. 39 and 50 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 de-regulated 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 business 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 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 enterprise and with the energy sector to ensure that the costs of energy for business are as competitive as possible through those measures at our disposal including notably a sustained focus on energy efficiency.

In the latter context I would urge all businesses of whatever size to place a relentless focus on energy efficiency. SEAI is available to provide advice and, subject to available resources, financial assistance in this respect. In addition there is now extensive tax relief available to businesses under the accelerated capital allowances (ACA) scheme for energy efficient technologies.