Irish gas transmission tariffs will be among the highest in Europe after new tariffs were sanctioned this week by the energy regulator, according to industrial gas users.

They objected in strong terms to tariffs published in draft form this summer by regulator Mr Tom Reeves. The new rate will be charged by Bord Gáis for the transmission of gas sourced from independent suppliers to 110 large users that operate in part of the market open to competition.

The average increase of 16 per cent is also expected to be used by Bord Gáis to justify an application for a price increase next spring for its customers in the domestic and industrial market.

Respondents in a consultation process said the high tariffs would increase costs and make Irish industry less competitive than elsewhere in the EU. Gas transportation costs have risen by more than 30 per cent since 1999, one said.

Any rise in gas prices will follow an increase in electricity prices next January and steep rises in university registration and VHI fees this autumn.

The rise Mr Reeves sanctioned was in line with a review last year by the Department of Public Enterprise. It was imposed in advance of a detailed review next year.

Those who opposed a draft direction on tariffs last summer included Aughinish Alumina, the ESB and Shell subsidiary Enterprise Energy Ireland, which is developing the Corrib field.

The draft was not changed after the consultation process and Mr Reeves said the "main driver" of the increase was a requirement to fund Bord Gáis's €1.37 billion capital programme.

While some respondents stated that the basis for reviewing the tariffs was flawed, others said the increase would not encourage the gas use required to meet the Kyoto targets.

"Intensive" gas user Aughinish Alumina said: "For Irish companies who manufacture commodities for sale on the world market any such cost increases cannot be passed on to final customers but must be borne on the balance sheet, thereby eating into margins and pushing them out of business in Ireland."

Enterprise Energy said a benchmarking exercise on Bord Gáis's costs should be carried out.

The ESB said gas transportation costs were extremely high by international standards. It said: "ESB has a number of very serious concerns about the whole tariff mechanism, its stability and its potential for serious upward impact on gas pricing in Ireland."