More than 500,000 households and 1,700 businesses will benefit from a fall in natural gas bills from October that will run to €100 a year for the average domestic user.
The Commission for Energy Regulation (CER) yesterday approved a cut in natural gas prices. The move had been expected since the fuel costs up to one-third less on world markets than it did last year.
However, the regulator went further than the 9.7 per cent cut requested by the State-owned supplier, Bord Gáis Éireann (BGÉ), and proposed a reduction of almost 11 per cent for domestic users.
It and BGÉ have also agreed a new set of tariffs that will cut costs and make pricing more transparent for around 1,700 small and medium-sized businesses. The fall in these prices will mean a reduction of almost 12 per cent for these firms. Both price cuts will apply from October 1st.
The domestic price cut will knock around €8.30 a month or €100 a year off the average household natural gas bill of €922.
BGÉ's 560,000 domestic customers will benefit. While the average price cut will be 10.88 per cent, the CER said the level of reduction in individual bills could vary because of proposed tariff changes.
The agency said that some consumers of small amounts of gas would see a bigger than average fall in their bills, while charges imposed on a small number with very high consumption will fall by less than average.
When BGÉ published its results in May, outgoing chief executive Gerry Walsh said a fall in world gas prices meant the agency would be seeking a cut of around 10 per cent.
Yesterday, the company's head of supply, David Bunworth, said "we are very pleased today to announce that the vast majority of our customers will further benefit this year from another decrease in the price of natural gas". The CER approved a 10 per cent cut in February. However, this followed the regulator's decision to increase the price by 34 per cent in response to world prices hitting a record high last year.
The two price cuts have not quite eliminated that increase. Someone who was paying €100 a month before last year's hike, would have paid €134 between last October and February, after which their bill dropped to €120.60. From next October, they will pay around €106.50. This means that the two decreases are worth €27.50 or 20.5 per cent.
News of the gas price cut came just days after the CER signalled that it would also cut electricity prices in November.
