Gas prices are to increase by 5.3% next month, the regulator has confirmed.

Isle of Man Energy has blamed a ’sharp and unexpected’ rise in wholesale gas prices.

The increase follows a mid-year review by the Communications and Utilities Regulatory Authority.

All of Isle of Man Energy’s regulated tariffs will increase by 5.3% from July 1.

Its domestic heating tariff will increase from 9.76p to 10.29p.

Isle of Man Energy pointed out that it had reduced gas tariffs by 13.8% earlier this year.

But it said: ‘Wholesale gas prices experienced a sharp and unexpected rise in January and February. Even with this adjustment, gas prices from July 2025 will still be lower than they were in July 2024. ‘

The company said it understood that tariff increases may be difficult for some of its customers to manage - and it offered payment plans to those who are eligible.

Managing director Aidan Baglow said: ‘While the challenges of a volatile energy market persist, we remain committed to providing reliable and sustainable energy solutions for the Isle of Man. Thank you for your understanding.’

CURA’s scheduled mid-year review looked at the impact of commodity prices and consumer demand on the allowed returns for Isle of Man Energy.

It found that estimated sale volumes for the year have been reduced following the warm spring, the estimated commodity cost per unit was less than previously assumed and the forecast return for 2024 had been overestimated.

As a result, the actual return earned needed to be reflected in the tariff for the remainder of the year, CURA concluded.

The next tariff review is scheduled for December 2025.

July’s increase will come as a shock to consumers who have benefited from a sustained period of price falls.

Isle of Man Energy’s tariffs fell from a record high of 22.21p per unit to 16.67p per unit in November 2022 following a regulator’s review after a big drop in wholesale gas prices.

Tariffs were cut again to 13.98p from March 2023 and reduced again, by 16%, in January last year and by 2.8% in the summer.

Following the last December review, prices fell by 13.8% in January this year.