Consumers warned energy bills will continue to soar in 2022 as crude oil hits seven year high
ENERGY bills will continue to soar in 2022 the north’s utility regulator has warned.
John French said gas suppliers will need to increase prices by at least another 30 per cent in the coming weeks in response to higher costs and reduced supply in the wake of the escalating Russian-Ukrainian crisis.
The Consumer Council has also warned that oil-fired homes, which account for around 60 per cent of households in the north, could soon be paying more than £300 for 500 litres of home heating oil for the first time since 2013.
Brent crude oil last night reached $90 per barrel for first time since October 2014.
The price of home heating oil has increased by 60 per cent since January 2021.
The consumer body estimates the average heating bill for a family of four could hit between £1,500 and £1,600 this year as a result.
Gas and electricity prices have already risen sharply since October on the back of huge increases in wholesale natural gas prices on the global market.
Wholesale gas, which accounts for the bulk of domestic bills, had averaged at around 50 per therm in recent years. It hit £4.71 per therm on December 21 2021.
Although the market has come back down, wholesale prices still remain four to five times above pre-crisis levels.
But the recent tension along the Russia and Ukrainian border is making the situation worse, with prices jumping 20 per cent since Friday.
John French said the energy crisis is a European-wide problem, with prices expected to remain high for some time.
“This isn’t a blip,” he said. “We now need to be working together to work out how we are going to support consumers.”
Electricity prices are unlikely to rise in the short-term, but the uncertainty over wholesale natural gas means further increases haven’t been ruled out later this year.
The north’s biggest provider, Power NI, put its prices up by 21.4 per cent on January 1, leaving the average household paying around £741 per year.
Firmus gas customers on the Ten Towns network have felt the biggest impact over the winter with tariffs rising 35 per cent on October 1 and again by 38 per cent on December 1, leaving the average home paying £968 per year.
Prices could now jump by another 30 per cent in the next few weeks.
The north’s other main gas supplier, SSE Airtricity, has been slower to put its prices up. A 22 per cent rise for its Greater Belfast and West networks on October 1 left the average annual household bill at £626.
Even with those sharp increases, gas customers will likely face smaller bills than many oil-fired households.
Stormont has already announced a £55 million emergency energy payment scheme. But John French said longer term solutions may need to be considered such as social tariffs.
Households in Britain in receipt of benefits can avail of a £140 winter discount, supplemented by other consumers.
Mr French said a similar initiative in Northern Ireland was ruled out in 2008 due to the scale of fuel poverty at the time. He said some form of social tariff may now need to be reconsidered to address the scale of the issue at hand.