Bernard Durkan (Kildare North, Fine Gael)
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Question 31: To ask the Minister for Communications, Energy and Natural Resources the extent to which he has been appraised of any proposed gas and electricity price increases; the reasons given for such proposed increases; the extent to which an evaluation has been done as to the negative inpact of any such increases on the economy with particular reference to job creation, job retention and competitiveness; if he will use his influence with the regulator and the service providers with a view to deferring any such proposals; and if he will make a statement on the matter. [21942/12]

Pat Rabbitte (Dublin South West, Labour)
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I do not have a statutory function in the setting of energy prices, whether in the regulated or unregulated market. Responsibility for the regulation of the electricity and gas markets is entirely a matter for the Commission for Energy Regulation, (CER), which is an independent statutory body. Prices in the retail electricity market for both domestic and business customers are now fully deregulated, as are those in the retail gas market for business customers. Since October 2011, CER only regulates the gas price charged by Bord Gáis Energy to domestic consumers. Prices charged to electricity customers, domestic and business, and to business gas customers, are wholly a commercial and operational matter for the suppliers. Ireland's electricity and gas markets, both wholesale and retail, are characterised by vigorous competition regulated by the CER.

The Government recognises that the cost of energy in Ireland is a serious competitiveness issue facing all energy consumers during this difficult period for the economy. The provision of secure, sustainable and competitive energy supplies is critical for the economy and is a challenge we are determined to meet. Global gas and oil prices have risen sharply since the start of 2011 driven by events in North Africa, Japan and the Middle East and high demand from the emerging economies of China and India. Volatile high prices have continued in global markets since the start of 2012. International oil and gas prices are set to rise further over the coming months. These trends will have an impact on domestic electricity and gas prices, and were reflected in the CER's decision to allow an increase in BGE's regulated gas tariff for the residential sector in October 2011 and in the recent increases in domestic electricity prices announced by the suppliers competing in that market.

Given Ireland's heavy reliance on imported gas and oil and relatively small market size, it is a price taker in the global fossil fuel market. The economy is therefore vulnerable to fossil fuel 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 fuel 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.

At a national level, competitive markets in electricity and gas help put downward pressure on prices. Focus must also be maintained on 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 are as competitive as possible, including sustained focus on energy efficiency measures.

The most recent analysis of data compiled by EuroStat for electricity and gas prices in the European Union, published by the Sustainable Energy Authority of Ireland (SEAI), covers the period January to June 2011. The figures show Irish electricity and gas prices performing well by reference to the EU average for medium to large business customers (above 2,000 MWh/annum). The VAT-exclusive electricity price in Ireland for these business consumers ranged from 10% to 17% below the EU average and from 13% to 19% below the Eurozone average. These customers accounted for 48% of the business electricity market. Prices for gas customers were below the EU average by between 4% and 25% for most business gas categories.

Larger domestic electricity consumers, representing 64% of the domestic electricity market (over 5,000 kWh/annum) experienced price reductions between 6.1% and 7.6% over the period. The prices for these consumers were between 7% and 19% below the EU average. In the first half of 2011 natural gas prices for household consumers fell by 3.3%. The EU average for gas price reductions for the same period was 1.4%. For this period the price of gas for Irish householders was 10% below the EU average. EuroStat price data for the second half of 2011 will be available and published by the SEAI next month.