IRELAND: Gas and electricity price hikes for Ireland customers: State’s largest energy supplier blames increase on rising wholesale prices internationally

Electric Ireland has announced another major increase in prices for electricity and gas customers, intensifying the current energy price squeeze.

The State’s largest energy retailer said it was raising its standard household electricity and gas prices by 26.7 per cent and 37.5 per cent respectively from October 1st in response to the recent increase in wholesale gas prices.

The move will impact around 1.1 million electricity customers and 175,000 gas customers. This is the fourth price increase announcement from an energy supplier in less than a week following hikes by SSE Airtricity, Community Power and PrepayPower.

According to Electric Ireland, the increases translate into monthly rises of €37.20 for electricity and €42.99 for gas for the typical residential customer. The increases will raise the average customer's annual gas and electricity bills by almost €516 and €446 respectively.

According to Pat Fenlon, executive director of Electric Ireland, "this continues to be a very difficult moment for customers and an unprecedented time in the energy market with hikes to wholesale gas prices of over 700% over the last 12 months and 200% since June 2022 alone."

"We are increasing electricity and gas costs for our consumers once more, but this is unavoidable due to the ongoing increases in wholesale energy prices, particularly gas. To put that in perspective, as of last week, wholesale gas prices for this winter were approximately £7.70 per therm, compared to costs this time last year of around £1.15 per therm.

This is the third significant price increase that Electric Ireland has disclosed this year. In May, it increased the cost of electricity and gas by 23 and 25 percent, respectively, in reaction to an increase in wholesale prices that was made worse by the conflict in Ukraine. Following this, there were gains of 10% and 30% in August. These followed two price increases from the previous year.

When all price hikes are considered, homeowners may expect to pay over €1,000 more for electricity and over €1,100 more for gas annually. Price comparison website Bonkers.ie's head of communications, Daragh Cassidy, said.

"It would be an understatement to suggest that these are unusual times. Price increases of this magnitude and frequency are undoubtedly unsustainable, he said. "The price of oil on wholesale markets surged by over 400% during the previous energy crisis in the 1970s. The price of gas has now increased by nearly 1,000%. That demonstrates the severity of the crisis we face, he said.

"Gas and power rates are at absolutely astronomical levels as winter approaches. And things might potentially get worse. Currently, the typical gas and electricity bill is about €4,000. That is almost the same as the UK price cap of £3,549.

"In the UK, a price cap increase to above €6,000 is anticipated for January. Since the UK supplies over 70% of our gas, our rates are normally in line with theirs (in fact, in recent years, UK gas and electricity have been slightly more affordable than Irish ones). Therefore, that illustrates what we might be looking at, Mr. Cassidy added.

"The government must decide right away how it will assist households in the upcoming months. Is the temporary VAT cut being kept in place, and will it be extended? Is there going to be another energy credit paid? What size will it have? Is the government going to impose a windfall tax on energy corporations, and if so, how exactly would that work given that many of them have their headquarters abroad and generate income from gas and oil that isn't even our own?," he asked.

According to a recent research by the Economic and Social Research Institute, if the current wave of price hikes continues, up to 70% of households in the Republic might become energy poor.