Household budgets are being hit by further increases in energy prices.
Electric Ireland’s move to hit its more than one million customers with a fourth hike in a year has raised fears that other suppliers will now raise their prices again, sparking a new spiral in energy prices.
Last year there were 35 separate energy price announcements, this year so far there have been 14 price increase announcements.
It comes as new figures show that inflation in this country hit a 40-year record of nearly 10 percent last month.
Electric Ireland is increasing its electricity cost per unit by 11 per cent in August and its electricity base rate by the same amount.
That means that if its electricity customers turn off all their lights and other electrical devices, they still have to pay €300 over a year in monthly utility bills to the state utility.
The latest price hike comes despite ESB, which owns Electric Ireland, made a profit of €679 million last year.
It is Electric Ireland’s second price increase this year and fourth since August last year.
The latest move will increase electricity costs by €164 per year for its 1.1 million customers.
When the latest rate hike goes into effect, the state-owned company’s electricity prices will have risen 67 percent cumulatively since last year.
It pushes gas prices up 32 percent in August, with the gas base rate rising by the same percentage.
The increase in the basic fee will increase the average bill by €42 per year. Gas costs are going up by 350 euros a year after the latest increase.
The four hikes mean electricity bills have risen by around €670 including VAT since last June.
And the gas bills have gone up by €650 including VAT.
In percentage terms, Electric Ireland’s gas prices will have risen by 93 per cent if the new increase is implemented for its approximately 145,000 gas customers.
There were also increases in April this year and in November and August last year.
The company blamed a 400 percent rise in wholesale gas costs for the repeated price hikes and insisted it had the lowest flat rate for electricity on the market.
Electric Ireland also said it had pledged €3 million to a new hardship fund to support its customers.
Suzanne Ward, Interim Executive Director of Electric Ireland, said: “We have delayed this increase for as long as possible but unfortunately the situation in Eastern Europe and reduced reliability of gas flows has resulted in persistently higher energy costs across Europe.
“We have seen a very significant increase in wholesale gas costs, which in turn is affecting both our gas and electricity prices.”
When asked how the recent surge can be justified given that its parent company ESB posted a record profit of 679mn energy utility last year.
Price comparison site Bonkers.ie’s Daragh Cassidy said given Electric Ireland’s size, the increases would be badly felt by many households across the country.
“We are going into next winter with absolutely astronomical gas and electricity prices. And it could get even worse,” he said.
Higher energy costs are the main reason inflation in this country hit an estimated 9.6 percent last month.
Energy costs in Ireland are estimated to have risen by 54 per cent since June last year.
Inflation in the euro zone is expected to come in at 8.6 percent in June, Eurostat said. Economists said the rise in inflation across Europe will hasten moves by the European Central Bank to start a series of rate hikes this month.
Goodbody Stockbrokers economist Dermot O’Leary said pressure on disposable incomes will intensify later in the year.
https://www.independent.ie/business/personal-finance/fourth-electric-ireland-price-hike-in-one-year-sparks-fears-of-energy-cost-spiral-41808033.html Electric Ireland’s fourth price hike in a year sparks fears of spiraling energy costs