Cost of living: How have Northern Ireland's energy bills changed in 2022?

People across the UK have been feeling the pinch this year

2022 was a year dominated by rising food and energy bills as record inflation put more pressure on households and businesses.

Prices rising faster than wages is what's creating this cost-of-living crisis, which means living standards are falling.

It is also creating a "cost-of-doing-business crisis", particularly in the likes of hospitality.

Many have said this has been worse than the pandemic, which had eroded whatever financial reserves they had.

Energy and food prices have been the main big drivers of inflation, which was 5.5% in January 2022 - it doubled in the last 12 months peaking at 11.1% in October, a 40-year high.

However the government's Energy Price Guarantee (EPG) kicking in capped the unit cost of gas and electricity from November, which meant inflation then dipped to 10.7%.

Let's take a look at how energy prices locally have changed over the last 12 months, including the government EPG, as estimated by the Consumer Council.

Home heating oil customers in Northern Ireland are to get a one-off payment

Oil

The cost of 500 litres of home heating oil for example has jumped by 83% up from £265 in January 2022 to £485 in December 2022, according to the Consumer Council.

Petrol prices

Prices at the pumps started in January 2022 at 141.8p for petrol and 144.1p for diesel, according to the Consumer Council.

But rising oil prices and the weakness of the pound pushed average prices to 189.9p for petrol and 197.5p for diesel in June 2022 - with some rural filling stations hitting £2 a litre.

At the time of writing this piece in December 2022, prices have fallen back to 148.7p for petrol and 169.9p for diesel.

Gas

• SSE Airtricity: Typical household annual bill in Jan 2023 = £1,103 - up 76% from January 2022

• Firmus (Greater Belfast): Typical annual household bill in Jan 2023 = £1,466 - up 65% from January 2022

• Firmus (Ten Towns): Typical household bill in Jan 2023= £1,327 - up 37% from January 2022

• How is Northern Ireland's energy market different?

• Your £600 energy payment scheme questions answered

Electricity

• Power NI: Typical annual household bill in January 2023 = £847 - up 14% from January 2022

• SSE Airtricity: Typical annual bill in January 2023 = £899 - up 19% from January 2022

• Electric Ireland: Typical household annual bill in Jan 2023 = £1,059 - up 45% from January 2022

• Budget Energy: Typical annual household bill in Jan 2023 = £1,337 - up 22% from January 2022

• Click Energy: Typical annual household bill in Jan 2023 = £801 - up 10% from January 2022

All of the prices above reflect the government EPG discounting electricity by up to 19.9p per unit and 4.8p per unit for gas in November, as well as the change in that discount from January when it will be reduced to 13.6p for electricity and 3.9p for gas.

Political stalemate at Stormont has delayed the delivery of the energy support scheme, the government says

What about the £600 support payment?

In May, a £400 energy support payment was announced by the then Chancellor Rishi Sunak. At that time we were told that support couldn't be rolled out here because of the lack of an executive.

Then in August, the Chancellor Nadhim Zahawi visited Northern Ireland and confirmed that it would be rolled out by the Department for Business, Energy and Industrial Strategy (BEIS).

In the autumn statement, an additional £200 was announced to take into account the large proportion of homes here on home heating oil and the latest update is that the £600 support will start arriving into bank accounts of direct debit electricity customers from January.

Interest rates

The main lever that's meant to keep inflation in check is interest rates, which are set by the Bank of England. The target inflation rate is 2% - it's currently running at more than five times that level.

At the end of 2021, the base rate was 0.25% but it has risen rapidly to 3.5% by the end of 2022 - the highest rate in 14 years.

• What are interest rates?

The latest rise was described as "painful, but necessary" and makes borrowing much more expensive, which has a huge impact on mortgages.

But it's a difficult balance to strike as it will take time for inflation to come down and, in the meantime, businesses and households will be paying more in the midst of a developing recession.

It's now expected interest rates could peak at about 4-5% next year, but that's lower than initially expected after the post "mini budget" market turmoil.

While it's widely believed that inflation has now peaked, the big question will be how long will it take for it to get back down to more manageable levels?

It's likely it will still be a significant challenge for both businesses and households in 2023 as well.