Consumers being burnt by 150% mark-up on gas by Bord Gáis Regulator should not grant 20% hike in gas prices Fine Gael Deputy Leader and Finance Spokesman Richard Bruton TD has called on the gas regulator not to grant a 20% price rise to Bord Gáis,and revealed that consumers are already paying a mark-up of 150% on gas products. There should be no easy or automatic assumption that the 20% price being sought by Bord Gáis is justified by ongoing rises in the price of wholesale gas. Although wholesale prices for gas have been rising rapidly,nevertheless today’s wholesale price represents less than 2c per kilowatt-hour. The ordinary household consumer of gas is paying between 3.6c to 7.1c for this unit. In other words Bord Gáis is applying a 150% mark up on average to the wholesale price by the time it reaches the consumer. There needs to be serious scrutiny of the efficiency of the structure along the distribution chain operated by Bord Gáis before a decision is made on price increases by the Regulator. ‘Bord Gáis has high operating profits. Last year its operating profits were €166 million from a turnover of €755 million. The Regulator needs to look seriously at whether the investment requirements of the company demand such high rates of profits. ‘Irish energy users have not been well served by this Government. The Enterprise Minister has exercised no scrutiny over trends in Irish energy prices. The EU’s bulletin of all prices gives hard evidence of what has been happening in the oil market: - The price which consumers pay for the three main oil products – petrol, auto diesel and home heating oil – have all increased faster in Ireland than in the rest of Europe, on average rising by 12% or more;
- Both the pre-tax element and the tax element have been rising faster in Ireland than in the rest of Europe;
- Of the average 20c increase in the price of a gallon of motor fuel, only 7c of this is explained by the increase in international oil prices, as 8.5c is from high taxes, and 4.5c from higher margins.
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