Isle of Man energy regulator rules out further gas tariff increase

Manx Gas is run by parent company the Islands Energy Group

A further increase in gas tariffs has been ruled out by the Isle of Man's energy regulator over concerns it would "disproportionately" impact customers.

Manx Gas made a second bid for caps to be lifted despite Tynwald agreeing to a 27.5% hike in bills in October.

The company said it was struggling to maintain profits, with wholesale gas costs at an "unprecedented high".

The Communication and Utilities Regulatory Authority (CURA) warned a hike would have wider economic impacts.

'Vulnerable customers'

A request for another price increase was triggered after Manx Gas wrote to CURA in November to say the "unprecedented" costs of gas meant it was losing "significant profit" on the previous year.

The monopoly provider said continuing to absorb this was "not sustainable" and argued it would impact on its ability to "continue to invest in infrastructure".

After a review, CURA found there was "low risk" to Manx Gas's solvency at present, and though commodity prices were "near an all-time high" it could not predict whether this was a temporary or permanent trend.

The regulator said upping prices would directly impact users, "particularly vulnerable customers", and could push up inflation while seeing affected businesses pass on costs to consumers.

CURA stressed its priority was to ensure Manx Gas remained solvent, not to see profits maintained or dividends returned, adding it would keep a "watching brief" on the situation.

The decision comes after the government reached an agreement with Manx Gas over a rebate, which will be paid to customers next year.