Phoenix Supply: Tariff Price Announcement
10th September 2008
Phoenix Supply today announced that exceptionally high wholesale gas costs have resulted in it having to increase tariffs.
With effect from 1st October 2008, the natural gas tariff will increase by 19.2% for the company’s domestic and small industrial and commercial customers. The 19.2% increase adds around £2.15 a week to the average household gas bill resulting in an average gas bill of £689 per annum.
Wholesale gas costs are the costs we pay for gas to be delivered to Northern Ireland and have more than doubled in the past year. Wholesale gas prices for the coming winter are 113% higher than the previous winter – up from 48[1] pence per therm to 102[2] pence per therm. Wholesale gas prices for the summer just ended are 140% higher than the same time last year.
David Strahan, General Manager of Phoenix Supply Ltd, said “Phoenix, like all energy companies across the UK, is experiencing record high wholesale energy costs. A price increase of any size is not welcome news, but in the face of such large increases in wholesale gas costs, we have no alternative but to review prices.”
Mr Strahan continued: “In arriving at this level of increase, we have consulted formally with the Northern Ireland Authority for Utility Regulation (the “Regulator”), the Consumer Council for Northern Ireland and the Department for Enterprise, Trade and Investment. Any increase to our tariff requires the formal approval of the Regulator, and is only granted after a detailed examination of our costs.”
“It is more important than ever for our customers to be as energy efficient as possible. We will be writing to all our customers in the coming days to provide practical advice on how they can reduce their energy consumption.”
Further Mr Strahan stated: “Natural gas customers can remain confident that the price they are paying for natural gas still remains extremely competitive compared to other fuel choices. In the past year alone, the price heating oil customers pay has increased by over 73%[3]. Since October 2007, heating oil prices have been on average 23% higher than natural gas and there have been periods in the past 6 months when heating oil has been as much as 54%[4] more expensive than natural gas.”
Concluding, Mr Strahan said: “We understand this increase is unwelcome news, however, our customers can be assured that we are committed to delivering gas at the lowest possible price both now and into the future. When the price Phoenix paid in wholesale markets reduced in the past, we were able to pass these savings on to our customers. If, as we hope, world-wide energy prices fall, Phoenix will, once again, reflect any savings in the price our customers pay.”
[1] Heren unweighted average month ahead price for winter 07/08.
[2] Heren forward price for winter 08/09 as of close on 5th September 2008.
[3] Based on comparison of average 900 litre retail price of six leading independent oil distributors on 4th September 2007 and 2nd September 2008.
[4] Based on average retail price of six leading local oil distributors on 29th April 2008.