Why are energy prices still increasing?
Energy price increases have been coming in one after another.
Gas and electricity suppliers say that the increases are due to rising wholesale market prices, but with the energy industry generating millions, can suppliers really not afford to make life easier for customers?
Our Head of Communications, Daragh Cassidy, spoke with KFM to give you the answers.
Listen back to the interview above, or take a look at the main points discussed in the interview below.
Why do we have standing charges?
Suppliers will say that standing charges are for the upkeep of the gas and electricity network.
However, it’s believed that the cost for this upkeep has stayed the same while standing charges have increased.
Suppliers also say that the standing charge depends on where you live, with rural areas being more expensive than urban areas.
It’s likely that suppliers have gotten into a bad habit of increasing their standing charges every time they increase the gas and electricity unit rate.
So with gas prices going up by 25% and electricity by 22%, the standing charges have also gone up by 25% for gas and 36% for electricity - that's close to €300 per year (inc. VAT) for electricity and €150 to €220 for gas.
Will prices continue to rise?
If you’re an Electric Ireland customer you’re facing price increases for both gas and electricity. The price hike from Electric Ireland will, on average, increase electricity bills by €300 per year, and gas by €150 to €220 per year.
Taking into account the November price hike last year as well, that’s a €700 - €800 increase.
Electric Ireland is at the lower end of the scale, with other suppliers announcing price increases of more than €1,000 per year to customers' bills.
Before the conflict in Ukraine, prices were already at an all-time high on wholesale markets which has and continues to affect Irish customers.
If those prices don’t decrease then supplier prices will continue to increase.
Why are suppliers making so much money but not reducing prices?
The ESB Group, which is a subsidiary of Electric Ireland, reported profits of almost €700 million euro in 2021.
Suppliers might say its reported profits were before tax and the real sum was around €200 million of which they gave around €170 million to the Government in the form of a dividend.
Electric Ireland remains among the most affordable suppliers at the moment with a total price increase of approximately €700 - €800 with other suppliers going as high as €1,400.
These price increases are still difficult to deal with no matter the size, especially as prices are going up across the board.
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What do you think about suppliers' approach to standing charges and their huge profits? Can they do more to help customers? Let us know your thoughts today!