ENERGY PRICE HIKES WIPING OUT TAX CUTS

Soaring electricity costs took €125 from average household, says CSO

HOUSEHOLDS have been hit by a raft of energy price hikes over the past year – wiping out a large chunk of the €7-a-week benefit for the squeezed middle from last year’s budget. CSO figures confirmed yesterday that electricity bills rose by nearly €125 over the past year – while the average gas bill increased by €65.

This means the extra €378 a year gained by the average family in the budget has been significantly eroded. Now experts are warning us to expect another series of increases in bills this winter.

The rises over the past 12 months – mostly because of hikes over the summer by all the main suppliers – took the average annual gas bill to €675, and average electricity bill to €960. Last year’s budget

saw families’ income jump by around €7 a week. But once the extra energy costs are taken away, there’s no significant gain.

Prior to the budget, Taoiseach Leo Varadkar had repeatedly championed the ‘people who get up early in the morning’.

However, expectations that working families would be rewarded in the budget did not materialise as instead most of the good news was reserved for those on welfare. And in the year since, electricity bills have jumped by more than 13% and gas by 9.5%, according to Central Statistics Office figures released yesterday.

The big rises are even more shocking as the official inflation rate is just 0.7%.

Wholesale energy prices show gas was up 55% on a year ago, while wholesale electricity prices were up 50%.

Electricity prices are also way up – as around 40% of electricity is produced by gas-fired power stations, meaning it is directly affected by gas prices.

This summer, due to the good weather, we saw little wind, increasing the reliance on expensive power stations and nearly doubling their share of the electricity supply to almost 75%.

That pushes up demand for gas and increases its price, which has also risen due to supply problems across Europe, as some drilling rigs had to be shut down for maintenance work in the summer.

Experts said it was unsurprising that energy costs are now pushing up the overall inflation figure as the recent summer hikes were well above the general inflation rate.

Daragh Cassidy, of price comparison website bonkers.ie, said: ‘Earlier in the summer, we saw the energy providers announce a raft of price increases that were well ahead of the general rate of inflation – up to almost 10% for electricity and 13% for gas – so it’s unsurprising energy costs are now pushing up the overall inflation figure.’

Sounding a further note of caution, he continued: ‘The increases were largely blamed on rising wholesale energy prices, so looking ahead, the omens aren’t great for consumers unfortunately.

People ‘will soon see the impact’

‘For July, Irish wholesale gas prices were up around 55% year-on-year, while electricity prices are up around 50%.

‘As a result, further price increases can’t be ruled out as we move into the winter months.’

Eoin Clarke, of price comparison site switcher.ie, echoed these sentiments, saying: ‘As wholesale energy costs make up such a big portion of supplier costs, we’ve seen a knockon effect to consumer prices, with eight out of ten domestic energy suppliers announcing price increases this summer. We also saw a slew of price hikes in the energy market last winter.

‘As such, it’s no surprise to see that electricity and gas prices are up significantly year-on-year.

‘The issue is that, over the sum- mer months, people probably weren’t paying too much attention to these price rises, as they wouldn’t have been using the heating, or needing to switch on lights until quite late in the evening.

‘However, the weather has definitely turned colder and the evenings are getting darker now, so consumers will soon start seeing the impact of the latest price hikes on their upcoming energy bills.’

Mr Clarke urged anyone ‘who hasn’t switched energy in the past year to do so now before the winter bills really start to bite’.

He elaborated: ‘The average dual fuel customer can save almost €300 by switching from standard tariffs to the cheapest deals on the market, so this will make a huge difference to consumers, particularly those who may be struggling to make ends meet.’