The authority that regulates gas in the island has said a reduction of tariff prices ‘may be warranted’.

The Communication and Utilities Regulatory Authority is carrying out a ‘triggered’ review in addition to the scheduled tariff reviews.

A triggered review is initiated in ‘a situation in which the inputs to the tariff calculations for the current period (based on a forecast for the current period) have changed in a way which would result in the recalculated tariff changing by more than 10%’.

On Wednesday this week the CURA initiated a triggered review of gas tariffs.

It said: ‘Due to recent price movements on the wholesale gas commodity market and in particular for future contract prices for the remainder of 2022 a reduction of tariffs may be warranted.

‘The authority last reviewed tariffs in August 2022 and at that stage forward commodity prices for winter 2022 were significantly higher than they are now.’

This is the first triggered review under the new framework and the CURA said that a ‘sustained downward trend must be established’.

CURA added: ‘Market conditions remain volatile and there is no long term certainty, although indications are that wholesale prices are likely to remain lower for a sustained period of time.

‘While there is little discretion as to the review being triggered it does not automatically follow that a change in tariff would occur, there are a number of issues to be considered as part of the review that could impact on such a decision.’

During this review there are two main issues that will require consideration, firstly the CURA must consider the need for stability in tariffs, which has been stated on many occasions is a priority, versus the potential for Isle of Man Energy to benefit from a windfall gain through effectively bringing revenues forward at the consumers’ cost.

Secondly, the Authority has to balance the need to maintain tariff stability versus sending clear signals to the market as to the appropriate levels of tariffs.

It has requested the information it requires to perform the review from Isle of Man Energy and will make a determination as soon as possible after it is received.

It will also liaise directly with Isle of Man Energy and other stakeholders, as required, during its review.

A further information notice outlining the outcome of this review will be published in due course but it is working to complete the review ‘as quickly as possible’.