New gas tariffs to be introduced on Friday (April 1) will be 58% higher than those which are currently in place.
The new gas tariffs have been reviewed by the Communications and Utilities Regulatory Authority (the Authority) which has ensured that Manx Gas is meeting its new legal obligations to charge a price for its gas that reflects the cost of supplying it.
This results in a new tariff that is around 58% higher than the one currently in place, which Tynwald agreed in October and was a 27.5% rise on the price then.
Inflationary pressure for gas were already high well before Russia invaded Ukraine.
The new regulatory framework ensures Manx Gas can only recover its costs plus a fair return.
This means that when the wholesale cost of gas is low, tariffs will be low. When wholesale gas prices are high, as is the case now, tariffs will be high.
The chief executive officer of the authority, Ivan Kiely, said: ‘Whilst these tariffs are high, these high levels are being driven by the current extremely high wholesale gas prices.
‘We have written into the legislation the need to review tariffs twice a year, in January and July, and when the global gas markets stabilise tariffs will come down in a timely manner.
‘Due to the way the billing cycles work, customers will likely not see the full impact of the increases for a number of weeks, I would also encourage households to submit a meter reading as soon as possible to ensure that they are billed accurately.
‘As we are now moving into the warmer spring/summer months, gas usage should start to reduce for most households which will help reduce the impact of this change.’
He added: ‘There is information available on our website to help consumers through this period; this includes answers to some Frequently Asked Questions and also some energy saving tips to help cut down on bills.
‘I know this will be an extremely worrying time for many gas consumers, but please do reach out if you need to.
‘You can contact Manx Gas to discuss setting up a payment plan and there is also budgeting help available from the Office of Fair Trading for those who need it. The confidential phone number is 686510.’
In a statement, chief executive officer of the Islands Energy Group, parent company of Manx Gas, Jo Cox, said: ‘Extreme volatility in the global energy market has seen costs spiral to unprecedented levels.
‘We know tariff increases are difficult for our customers to manage but in the current climate they unfortunately cannot be avoided.
‘The regulatory process ensures that increases are directly linked to costs overall, and that our customers’ supply is secure.’
Manx Gas added: ‘The regulation framework agreed by CURA and Tynwald will be implemented from April 1 2022 and will affect all gas tariffs.
‘As a result the central heating tariff used by domestic customers will see an increase of 5.7p per unit, taking the cost per unit to 15.4p, an increase of 58%.
‘Manx Gas will also be reducing the discount offered to customers who pay by direct debit from 2.5% to 1%. Customers can still benefit from a £16.10 saving per year by signing up for this option.’