Gas prices: Regulator warns of 30% increase

The Utility Regulator is warning that households and businesses will face gas price hikes of at least 30% in the coming weeks.

Concerns over escalating tensions involving Russia mean further increases are also likely this year.

Wholesale energy costs have risen significantly since last July and they account for about 50% of bills.

As a result, SSE Airtricity put up prices twice last year and Firmus also raised its prices three times in 2021.

Both suppliers are expected to increase prices further in the coming weeks as higher wholesale prices will be passed on to customers.

Prior to Covid, wholesale natural gas was about 50 pence per therm.

• Regulator warns NI energy prices will soar

• Why are gas prices so high?

• Northern Ireland customers warned of gas bill hike

Surging prices due to supply issues mean wholesale prices peaked at £4.71 per therm in December in 2021.

Reduced supply of gas from Russia (via Ukraine) is having a huge effect on prices.

Forecasts expect these higher prices to continue throughout 2022 into 2023.

Customers will again face higher bills in 2022 and 2023

John French, chief executive of the Utility Regulator, said: "Today we're seeing gas prices at around £2.20 and on the futures market coming into the winter it's significantly more than that.

"So these prices are a concern - this isn't a price blip, this is a resettling of the market due to the Ukraine and Russian conflict.

"Historically, you might have seen gas prices rise a couple of pence in a year depending on if the weather was cold - we're seeing price movement of 50 pence within a day, which has never been experienced before.

"Unfortunately, we're expected to see at least a 30% increase, probably slightly higher, for consumers going forward on the gas price."

Peter McClenaghan, from the Consumer Council, said it was bad news across the board.

"It's bad for gas consumers, but there's bad news out there for all consumers," he said.

Peter McClenaghan, from the Consumer Council, said it was bad news across the board for consumers

"If you're a driver and you drive a petrol or a diesel car, prices on the forecourts look like they're going to increase in the coming months.

"Similarly, if you use home heating oil to heat your home, prices are on the rise in relation to home heating oil as well.

"So across the board for consumers these are really worrying times."

What about electricity bills?

Power NI, the only regulated supplier in Northern Ireland, put up prices 21% from January.

No immediate price rise is expected there, it usually takes a bit longer to feed through.

That will be one to watch in the weeks and months ahead.

In Great Britain, an energy cap has shielded households from these price rises at about £1,200.

However, Ofgem is expected to announce a significant hike on 7 February which will take effect from April, with some warning it could hit £2,000.

That is why more suppliers in Great Britain have gone bust than in Northern Ireland.