From July, Bord Gais will be able to decide on its charges without getting permission from the regulator
CHARLIE WESTON PERSONAL FINANCE EDITOR
FAMILIES can look forward to reductions of up to €150 in the annual cost of gas after the largest supplier in the market was cleared to set its own prices.
From July, Bord Gais will be able to decide on its charges without getting permission from the regulator – in what is set to be a massive boost for householders.
Energy experts said this was set to lead to cuts of up to €150 a year in the annual prices charged by Bord Gais Energy.
The price of gas for a typical family is now close to €1,000 a year following a rise in prices at the end of last year, according to Simon Moynihan of price comparison site Bonkers.ie.
Gas prices have shot up by 37pc in the past three years, adding €266 to the annual cost of a typical family's bill.
The entry of Energia into the market at the start of the year means that there are now five gas suppliers to households.
Mr Moynihan said Bord Gais is currently around €140 a year more expensive for gas than Energia and Flogas. It will have to reduce its charges by around €150 to compete with its two cheaper rivals.
Bord Gais' cuts will likely be in the form of a new discounted rate for gas customers who move to it.
"Bord Gais will be free to set its own prices from July 1 and in order to catch Energia and Flogas it will have to reduce its prices to the level they charge," he said.
Bord Gais, which has 350,000 gas customers, is the only regulated supplier of energy left in the country.
Electric Ireland, the retail name for ESB, was allowed to set its own electricity prices without reference to the energy regulator, the Commission for Energy Regulation, in 2011.
To achieve gas price deregulation, Bord Gais Energy is required to have a gas market share of less than 55pc. It is expected to reach this level by July.
The energy company is to be sold for €1.1bn to a consortium led by British energy giant Centrica. Centrica is the owner of British Gas, one of the largest energy suppliers in the UK and the deal is expected to close in weeks.
Mr Moynihan said: "The deregulation of Bord Gais Energy is great news for consumers.
"Ireland now has a fully deregulated energy market which will see increased competition and better prices for consumers."
However, sources close to Bord Gais Energy were anxious to play down the prospect of price cuts for gas.
But there are indications that the company may now offer discounts on so-called bundles, where householders take both gas and electricity from the company.
Energy companies are competing hard for customers at the moment.
Both Flogas and Energia are offering consumers 15pc off on their gas costs.
Electric Ireland and Energia currently offer the best dual-fuel deals, Mr Moynihan said.