LISTEN: Natural gas supplier Firmus set to hike prices by 35%

Q Radio News/PA

Firmus Energy has said it will increase its natural gas prices across much of Northern Ireland by 35.15% from October.

The company said it was sorry to make the announcement, which it blamed on substantial rises in global wholesale gas prices.

The change in tariff by Firmus will affect the “Ten Towns” network area, which includes Antrim, Armagh, Ballymena, Ballymoney, Banbridge, Coleraine, Craigavon, Limavady, Londonderry, Newry, and more than 25 other towns and villages in the surrounding areas.

The Consumer Council has said the increase means the yearly gas bill of a typical household with a credit meter will rise by about £182.

Another supplier, SSE Airtricity, announced last week that it would increase its natural gas prices by 21.8% from October.

It followed a warning from utility regulator John French that Northern Ireland households and businesses were facing substantially higher gas bills this winter.

Michael Scott, managing director of Firmus Energy, said: “We are very sorry to have to make this announcement as the last thing we want is to have to increase our prices.

“However, given the massive increases in the cost of purchasing natural gas on the global markets, it is simply unavoidable, as these costs are totally beyond our control.

“With the world starting to reopen again, following the Covid-19 restrictions, this is leading to increased demand for natural gas and that has been driving the prices up at alarming rates. As normality returns, we expect prices to begin to stabilise again.”

Michael Scott, Managing Director of Firmus Energy

Customers in the Greater Belfast area are not affected by this price rise, although an announcement regarding tariffs there is expected in the coming weeks.

Firmus supplies more than 108,000 customers in Northern Ireland.

Peter McClenaghan, director of infrastructure and sustainability at the Consumer Council, said: “The size of the Firmus Energy price increase will shock consumers, make household budgeting more challenging, and is particularly difficult as consumers have no option to switch supplier.

“This increase follows rises in electricity, grocery and fuel costs and is particularly bad news for consumers in vulnerable situations as it will coincide with the end of the furlough scheme, the removal of the Universal Credit uplift, and the start of winter.”

Also commenting on the announcement, John French, Utility Regulator Chief Executive said. "This announcement unfortunately reflects the unprecedented increases in international wholesale energy markets. Wholesale gas prices continue to break record levels.

"Currently, the cost of wholesale gas has risen by 170% since the start of April 2021.

“While we have no power to compel a company to sell energy for less than it costs, we have fully scrutinised Firmus Energy’s submission. 

"This has been carried out in consultation with the Department for the Economy and the Consumer Council, and ensures that the company’s submission accurately reflects the costs they have incurred.

“To try and reduce the impact of this increase, we brought forward our review of their network tariffs which has enabled a 4.5% or a £20 reduction in Firmus Energy’s original application. The final agreed increase therefore will be 35.15% or £183 per year for the average household.

“As a result of this increase, the average domestic gas bill in the Ten Towns area will rise to £701 per year. For comparison, an annual average household gas bill in GB is £625 per year and £782 per year in the Republic of Ireland.

 “As the table below shows, the average annual domestic gas bill in the Ten Towns licence area fell during the Covid-19 pandemic. However, due to the increases in wholesale energy costs, the average bill has risen back to prices previously seen in 2018."

Mr French continued, “The rise in the cost of natural gas reflects similar movements that have been seen in other heating fuels, such as home heating oil."

John French, Utility Regulator Chief Executive