CONSUMERS AND small businesses are facing further hikes in gas and electricity bills after the State's two biggest energy companies sought permission to increase their charges yesterday.
The move comes at a time when oil and gas prices, which ultimately determine what both companies charge, have fallen from the highs they hit in the middle of the year.
The Commission for Energy Regulation said yesterday that the ESB has asked for a 5.6 per cent increase in average electricity prices, while Bord Gáis wants to charge an extra 3.9 per cent for natural gas.
The ESB is proposing to add 5.8 per cent to the rates that it charges the Republic's 1.7 million householders.
This would add around €9 to the average domestic bill, bringing the cost of electricity to around €164 a-month.
If the Commission for Energy Regulation gives the ESB the go-ahead for the price rise, it will be the second faced by consumers this year and bring the total average household increase to over €30 a-month.
Two months ago, the company was allowed to raise its charges by 17.5 per cent.
However, the ESB says it has put aside €300 million of its profits to offset the impact of any further price increase.
Without this, the company believes it would have to seek an increase of almost 10 per cent.
Bord Gáis is proposing to increase charges to its 500,000-plus domestic users by 4.2 per cent, close to half the 8 per cent that the company last month believed it would have to seek as a result of rising gas prices on world markets.
Such an increase would add around €3 a-month to the average household bill and follows an earlier 20 per cent hike imposed in September.
Bord Gáis is hopeful that it will not have to apply the full increase, as gas prices have fallen dramatically in recent weeks.
The company has foregone a €17.5 million clawback from the market due to it since last year.
Oil prices are the key benchmark for both companies.
Yesterday, crude prices rose by almost $7 a barrel to $70.90 in New York.
That price is half the $140-plus high it reached in July.
However, NCB stockbrokers analyst Peter Hutton forecast yesterday that prices should start to climb again next year to around $95 a barrel, and to $100 after that.
He points out that demand from emerging economies such as China and India will remain strong, while the impact of US drivers switching to more fuel efficient cars will only be marginal.
At the same time, he points out that if prices remain low, exploration activity will slow, with a downstream hit on supplies.
Increases in oil prices will put pressure on gas, with the result that both the ESB and Bord Gáis could be forced to seek further increases in prices in 12 months time.
