Bernard Durkan (Kildare North, Fine Gael)
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Question 509: To ask the Minister for Communications, Energy and Natural Resources the extent to which an evaluation has been carried out into the possible negative impact of gas and electricity prices to the consumer, domestic or commercial, in the near future with particular reference to impeding competitiveness resulting in job losses; and if he will make a statement on the matter. [24205/11]

Pat Rabbitte (Dublin South West, Labour)
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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.

Ireland's electricity and gas markets, both wholesale and retail, are characterised by vigorous competition regulated by the CER. Prices in the retail electricity market are now fully deregulated. From 1 October next, gas residential consumers are the only segment of the electricity and gas markets where prices are regulated. Prices in the electricity market and unregulated part of the gas market are wholly a commercial and operational matter for the suppliers. The recent CER decision to approve a 21.7% increase in the Bord Gáis tariff from 1st October is the first price increase for BGE's residential gas customers since September 2008. It follows three successive price cuts approved by CER. There have also been recent announcements by suppliers of electricity price increases.

The driving factor in these increases are gas price trends over the past year which look like continuing into the future. Looking forward, wholesale gas prices for the coming winter are more than 30% higher than for last winter. Ireland is a price taker in the global fossil fuel market and the economy is therefore vulnerable to energy price fluctuations and price rises.

Suppliers in neighbouring markets are also subject to similar pressures and price increases. Last May, Phoenix Gas in Northern Ireland announced an increase of 39% in domestic and small business tariffs. The 'Big Six' gas suppliers in Britain have all increased domestic tariffs by 17% to 18% and this follows increases some months earlier.

The Government is committed to competition as a way of exerting downward pressure on prices. Competition is achieving competitive pressure on suppliers. It stimulates them to offer better deals and discounts.

Business and domestic customers can therefore increasingly avail of the competitive offerings from electricity and gas supply companies active in the retail end of the market. 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.

Actions taken over the last two years have improved Ireland's competitiveness in the gas and electricity sectors in the two years to end 2010 when compared with other European countries.

Analysis by the Sustainable Energy Authority of Ireland (SEAI) of Eurostat data for the second half of 2010 shows that for large business customers of electricity Irish prices were between 91-93% of the Eurozone average for the last six months of 2010 while prices for small to medium business customers ranged from 4% below to 6% above Eurozone averages depending on the category. Gas tariffs remain competitive with business tariffs at 83-90% of the Eurozone average. Increased competition has clearly had an impact.

In addition, we must focus on all possible additional actions to mitigate costs where possible for business and domestic customers. This is essential for competitiveness, employment and for economic recovery. 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.

I would also urge all businesses of whatever size to place a relentless focus on energy efficiency. The 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 for energy efficiency measures.