Gas prices may rise by up to 19%

Consumers are facing a steep rise in gas prices this autumn after Bord Gáis said it would seek permission from the Commission for Energy Regulation (CER) to impose a price increase of up to 19 per cent from October.

The company made the announcement at the publication of its annual results for the year ending December 31st last which showed an increase in profit before tax of 29 per cent to €166 million on the back of a 10 per cent increase in turnover to €1.2 billion.

Bord Gáis said gas sales grew 8 per cent to €763 million and gas transportation sales were ahead by the same percentage at €169 million.

Electricity sales grew 18 per cent over the period to €239 million and the company plans to invest heavily over the next six years to increase its energy supply capacity. By 2014 the company said it expects half of its revenues to come from electricity supply.

John Mullins, Bord Gáis chief executive said 2007 had been one of significant growth and had seen the start of work on its new power station at Whitegate. This development would underpin the company's future electricity supply growth, he said. 

The company was looking to build a "diverse portfolio of assets within the Irish energy sector" and had earmarked €2 billion for investment in new business areas, he added.

"We hold about 8 per cent of the electricity market in Ireland at present and plan to grow that share significantly. It is our intention to enter the residential electricity supply market prior to the commissioning of our Whitegate asset in 2010 . . ."

He said the group had a book capitalisation of over €2.4 billion at the end of 2007 and a well organised debt capital structure.

Rising gas and oil prices meant that a price increase was "unfortunately likely in October 2008". The increase sought will be in the 17 to 19 per cent range and if granted, would apply from gas consumed after October 1st.

During the last 12 months Bord Gáis reduced its prices by 20 per cent on average for residential and SME customers.

He said in a year when the gas market was fully opened gas sales volumes had risen 14 per cent and gas customer numbers grown by 5 per cent to 607,000.

Bord Gáis imported over 90 per cent of its gas last year. He said indigenous gas supplies accounted for just 9 per cent of the gas sold last year, a share that would decrease in the "absence of further landings of gas".