Bord Gáis is expected to seek an increase in domestic gas prices after its regulator, Mr Tom Reeves, increased gas transmission tariffs yesterday.

Any increase in prices is likely to apply from spring 2003. It will follow steep increases in the price of electricity in January, a VHI increase this autumn and a rise in university registration fees.

Any increase in tariffs will be reflected in the Republic's inflation rate, which is Europe's highest.

But Bord Gáis will argue that real gas prices have declined by 50 per cent since the last increase was sanctioned 15 years ago.

With gas prices on international markets increasing rapidly in recent years, competitive deals secured in the foward-purchasing of energy have wound down.

Mr Reeves said in a statement that no application had yet been made for a review of domestic prices. But he added: "It is expected that such a review will commence in the near future."

The extent of the increase to domestic users that Bord Gáis will seek is not known. A company spokesman would say only that any application for a review would be a matter for discussion with Mr Reeves.

However, it is thought that a rise of 15-22 per cent will be sought in the prices paid by small-scale industrial users whose supply is confined to Bord Gáis.

Gas transmission tariffs increase by 16 per cent from today, according to a determination by Mr Reeves.

Such prices refer to the fees paid by large industrial customers for bringing gas sourced from independent sellers through the national system. There are about 110 such users, who are not obliged to source gas from Bord Gáis.

Because the transmission tariff is only one element of the gas supply price, it is thought that this determination will increase the overall price paid by the heaviest users of gas by 3 per cent. The fees paid by smaller gas users will rise by about 2 per cent.

As well as increasing transmission tariffs on major pipelines, Mr Reeves decreased the tariffs to supply gas through minor pipelines in the distribution network by 3 per cent.

He said: "The cost of natural gas comprises the cost of buying the gas itself, transporting it through the transmission network and the cost of distribution and supply to end-users. The main driver behind the increases in transmission tariffs is the substantial investment, approximately €1.37 billion, in the natural gas transmission network."