Flogas Natural Gas has today announced that they will increase gas prices by 1.45% from May 1. The price increase will apply to unit rates and standing charges and will add around €13.25 to annual average household bills on the Flogas standard rate.
The price increase, which will apply to Flogas domestic piped gas customers, is small in comparison to those we’ve seen in recent years. The top Flogas discounted offer will remain the cheapest gas offering for new customers as Flogas has vowed not to increase their 4.5 cent ex-VAT unit rate.
All Flogas customers will see a standing charge increase of 1.45% from €89.40 to €90.70 per year VAT inclusive.
Gas price increase announcements from all suppliers have been generally expected. This is because the Commission for Energy Regulation granted Bord Gáis a 1.47% price increase in March. When the regulator grants a gas price increase to Bord Gáis, other suppliers generally mirror it.
Flogas has said that the price increase is “due to an adverse movement in exchange rates coupled with an increase in the unit cost of transporting gas through the pipeline network.”
The increased cost of transporting gas was also stated by Bord Gáis as the reason for increasing prices last month. Suppliers have said that transportation cost increases are the direct result of customers using less gas.
Bord Gáis Energy is the only regulated gas supplier and needs to get approval from the Commission for Energy Regulation before it can increase gas prices.
The price increase granted to Bord Gáis in March may be the last time the company needs to apply to the regulator before it can change prices. This is because Bord Gáis has almost reached the thresholds necessary to attain deregulation.
Once Bord Gáis is deregulated for gas prices, all energy suppliers will be able to set their own prices as they see fit.
Commenting on today’s Flogas price increase announcement, bonkers.ie managing director David Kerr said “This increase is not surprising and is the first of what we expect will be increases from all deregulated gas suppliers. The increase takes effect two weeks after the Bord Gáis price increase which won’t save customers much, but it will bring them into the low usage summer months.”
Mr Kerr concluded “We are looking forward to full energy deregulation which is expected in the coming months. We’ve seen in recent weeks the positive effect of competition in the electricity market, and we hope to see something similar in the gas market soon as well.”
However it comes only a short time after Flogas applied a 1.95% increase. That increase, which took effect in October 2013, added €17.50 to average customer bills.
Flogas currently supplies around 5% of the residential gas market.
Standing charge increase from €78.77 to €79.91. Extra €1.14 per year (€1.30 inc-VAT).
Standard unit rate increase from 5.268 cent to 5.334 cent.
New customer discount unit rate will remain 4.5 cent ex-VAT