The regulator has turned down Manx Gas’s request for a further price rise.

The company asked for another rise just two months after Tynwald agreed to the Despite a 27.5% increase to the price cap being supported by Tynwald in October, Manx Gas had returned to the regulator to ask for more.

It said it was struggling to maintain profits, with wholesale gas costs at an unprecedented high.

The Communication and Utilities Regulatory Authority (CURA) said a rise would have wider economic impacts.

On November 29 Manx Gas wrote to the authority, advising that, in light of continuing high commodity prices, it was losing ’significant profit’ compared with the previous year and requesting ’a further review from CURA and recommendation of either another price increase or an alternative solution to rectify the significant impact on our business’.

Gas commodity markets, particularly in Great Britain and Europe, are in the midst of an unprecedented crisis brought about by both economic and political factors.

Demand has risen after lockdowns ended and the markets have been volatile.

In addition, there are political factors surrounding the supply of gas from Russia to the EU.

The CURA said: ’What is clear is that the international crisis is beyond the control of all stakeholders and there is little that can be done in the Isle of Man context to mitigate it.’

Manx Gas said it could continue to service customers on the island but it said: ’It is not sustainable for us in the long term to continue to absorb this loss of profit.’

It wanted a further increase to tariffs but didn’t say how much.

CURA said that the risk of Manx Gas going bust was low.

A rise would hit customers, it said.

And it added: ’In addition to the direct impact on consumers the authority also should be mindful of the impact of higher gas prices on consumers, and the wider public, specifically through inflation as this has an impact on all members of society.

’Inflation is currently higher than at any stage in the last 10 years and a gas price increase would feed into the inflation rate directly.’

Businesses reliant on gas would face increased costs and would likely pass these costs onto consumers, who were already facing increased costs of heating their homes. In this way any increase in tariffs would have an indirect impact on inflation.

That would then hit the wider Manx economy.

It said that while commodity prices are near an all-time high, it is unclear if this is a transitory phenomenon or not.

In the recent past the market has seen dramatic increases in price but it proved to be short-lived. I

It concluded: ’It would be wise for the authority to maintain a watching brief on it at this time but there is insufficient data available make any reliable predictions as to whether this will be a sustained increase or not.’

The authority is now planning to have more detailed price controls in place in early 2022.

It hopes that the effect of these controls will be to ensure that tariffs are fair.

’The biggest change that this regulatory framework will bring about will be transparency - all stakeholders will be able to see how the tariff is made up and that the returns being generated by Manx Gas are in line with market norms and are closely monitored,’ the authority said.

’This means that consumers can have confidence that the tariff they pay is reflective of the cost of the gas they consume and the cost of providing it.’