NATURAL gas supplier Phoenix has offered some relief to hard-pressed consumers and small businesses with the announcement today of an 8.5 per cent cut in gas tariffs.
The cut, which comes into effect from April 1, will go some of the way to easing the burden of the 39 per cent increase imposed in May of last year when the firm blamed soaring wholesale gas prices for the rise.
Today’s announcement comes as a result of those prices falling again, said Phoenix Supply managing director David Strahan.
Phoenix Supply is the largest natural gas supplier in Northern Ireland, supplying around 130,000 domestic and business customers in the Greater Belfast area.
It has been locked in battle for customers with firmus energy, a subsidiary of the Irish state supplier Bord Gais Irish, which began business in the province supplying customers in the ‘10 towns’ following its pipeline north through Newry to Londonderry and including towns such as Antrim and Coleraine.
The firm began supplying gas to domestic and small commercial customers in Belfast in competition with Phoenix in January last year.
Yesterday, as it emerged that firmus is part of a raft of assets to be sold off by the Irish government, the company said it would continue to track the Phoenix price alongside its existing discount offer.
“We will continue to honour our commitment to domestic credit customers to provide 10 per cent cheaper natural gas than Phoenix for the first year after a customer switches and five per cent cheaper for the second year,” said Michael Scott, acting general manager for firmus energy.
The average Phoenix Supply domestic gas bill will fall by £51 annually to give an average annual domestic gas bill of £550, or £10.58 per week, said Mr Strahan.
After taking this decrease into account, natural gas prices in Northern Ireland will be around six per cent lower than the average standard tariff of the major suppliers in Great Britain and 10 per cent below the standard regulated tariff in the Republic of Ireland, he added.
“We are delighted to be able to make this announcement today which again demonstrates our commitment to delivering natural gas at the lowest sustainable price to our customers,” he said.
The tariff reduction comes after a consultation process involving the Utility Regulator, Phoenix, the Consumer Council and the Department of Enterprise, Trade and Investment.
Regulator Shane Lynch welcomed the price reduction as good news for consumers, “especially considering the financial pressures on household budgets”.
“We strongly believe that the price paid for gas must reflect the actual cost of delivering gas to consumers’ homes and are committed to ensuring energy bills are as low as they can be.
“We will remain vigilant and continue to monitor international wholesale gas prices, and should any significant downward changes occur we will act quickly to make sure this is reflected in lower gas bills for PSL consumers.”
The sale of firmus is part of the Dublin government’s cash-raising strategy to meet bailout terms agreed with Europe and the International Monetary Fund.
The plan is also understood to include the sale of a part share of the government’s stake in Aer Lingus and some parts of the state-owned electricity company ESB.
Like Bord Gais, ESB has begun operating in Northern Ireland and in December 2010 bought transmission and distribution company Northern Ireland Electricity (NIE) from parent company Viridian for £1.2 billion.
The firm also owns a share in the Coolkeeragh power plant in Londonderry which may be involved in the planned sale.
Bord Gais owns the gas transmission network to the 10 towns outside Belfast that firmus supplies, but it is understood that that network will not be offered for sale.