Yet another gas price rise looms for consumers in the island.
The wholesale price of gas on April 1, the date of the last gas price rise, was £257.32 per therm.
As we went to press, it stood at £356.25 per therm, having been steeply increasing since July 18 from £193.68 per therm.
At the beginning of April, gas tariffs increased by 58% but standing charges remained unchanged, as approved by CURA, the island’s gas regulator.
World wholesale gas prices have jumped in the last 12 months and the authority must ensure that tariffs cover the cost to supply gas on the Isle of Man. Not doing this risks disruption to the gas supply. In the last 12 months gas tariffs in the Isle of Man have risen by 102% in total.
A review of gas tariffs is expected this month. The review will be undertaken by the CURA and could result in a tariff change.
The CURA can instruct Manx Gas about the prices it can set, while ensuring that the gas company continues to make a fair profit but doesn’t abuse its position as a monopoly supplier.
Meanwhile, ahead of the potential gas price rise, the CURA has carried out a consumer bill impact assessment, which shows the change in a resident’s bills depending on how much gas they use, however the authority says this isn’t reflective of every household in the island.
It shows that both gas and oil customers have faced huge increases in the face of soaring inflation.
CURA has split its assessment into low, medium and high annual gas consumption, so a household consuming a low amount averages out to 8,000 kWh (kilowatt-hour), with medium being 12,000 kWh and high being 17,000 kWh. From this, it has calculated that a medium consumption household would have seen a rise of about £683.57 in the space of 12 months. Therefore bills would have risen from £1,168.96 in 2021 to around £1,852.52 this year.
CURA says the annual bill is an estimate of the average gas tariff usage over the next 12 months, assuming the tariff remains at this level.
‘In reality this is very unlikely to be the case given the next review scheduled for July,’ it said on its website. ‘In addition to this there will be a standing charge of around £61, however the standing charges have not been increased.’
Around 25% of annual gas consumption tends to be through the months of April to September, which has been used as the basis to calculate the total summer bill over these six months. A medium gas consumption household would have experienced a £170.89 increase in their bill from summer last year, jumping from around £292.24 to £463.13.
Meanwhile, the cost of heating oil, as of June 2022, stands at 9.95p per kWh in a 900-litre boiler, according to the Office of Fair Trading.
When comparing this to June the year before, it has risen from about 4.20p kWh, meaning there has been a 5.75p kWh increase in 12 months.
However, for a 450 litre oil tank, it’s 10.36p kWh as of last month – around a 5.86p rise from last year.
For example, one reader’s oil bill increased from £375.75 in August 2021 to £722.45 in May 2022 – a difference of £346.70.