The CEO of Manx Gas’ parent company has said the triggering of a request for a second review of gas prices in the matter of months is an ‘automatic process’.

Gef reached out to Manx Gas after the island’ utilities regulator announced the company was seeking a further review of gas prices, despite a 27.5% increase earlier this summer.

Jo Cox, CEO of Islands Energy Group, said that part of the regulation agreement with CURA means that Manx Gas is ‘obligated to report to them every three months on what our forecast profits will be, after purchasing natural gas and LPG on the markets and taking our operating costs into consideration’.

Jo Cox

Ms Cox added: ‘A request to CURA to raise our tariffs is automatically triggered when it is proven that we will fall short of the minimum 10% profit margin agreed with the regulator. The profit margin allows for sufficient operating funds to facilitate investment in our infrastructure: this includes ensuring that we meet and exceed all stringent health and safety targets for our assets, and covers staff costs to help us meet excellent standards of service in (for instance) unloading LPG gas ships, filling bulk canisters and distributing them to people’s homes around the island, advising customers with billing queries, maintaining customers’ boilers, conducting Comfort Checks, etc.’

Historically High

Gas prices have remained at a far higher level than we, as consumers, are used to. Ms Cox explained that historically Manx Gas has been buying at a cost of £0.60 or less per therm; however, when the global prices began to rise in August, averaging at £1.07 per therm. The latest figures from the BBC’s dashboard show these are now at £2.95 per therm.

Ms Cox added: ‘The effects of this volatility have been felt across the world: an example is Northern Ireland where their supplier, Firmus, has imposed three price increases in twelve months amounting to a rise of 95%. All global suppliers are facing similar pricing pressures.’

‘Please be assured that we are acutely aware of the impact of price rises on people’s cost of living and understand the genuine worries that our customers have about paying their bills this winter. We would again like to remind you that you can contact us to discuss any concerns you may have about your bills: we can talk you through your options, offering affordability plans and signposting you to any additional help that may be available, as we have made a significant financial donation to a local charity who can offer budgeting advice and assistance.’

CURA

The problem for Manx Gas comes with the regulator CURA saying that when it agreed to up the price by 2.1p per unit earlier this year, it was done to ensure that ‘the island’s public gas supplier remains solvent during an unprecedented international crisis’. However, on Friday, CURA said Manx Gas’ justification for a further review was ‘on the basis of “minimising the impact and continued decreasing profit on our business, to ensure we can continue to invest in the infrastructure on the Isle of Man”’.

And while it will point to these high prices, it will find little sympathy with residents who have seen inflation hit them harder in the past few weeks and months. We don’t actually know if CURA has the power yet to authorise an increase or if it would have to make a recommendation to Tynwald members to approve. But, with the MUA also due to announce its increase, which will be an inflation matching minimum of 5% as per a Tynwald resolution, politicians could face a difficult decision with their voters keeping a keen eye on them and the money in their pocket.

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