Gas Tariffs Could be About to Fall

The Communications and Utilities Regulatory Authority is exploring whether gas tariffs should be brought down.

A statement from CURA has been shared on the Moneywatch IOM Facebook page by longtime campaigner Barry Murphy and comes amid falling global wholesale gas prices.

The last time prices went up, in September, they rose by 22.2106p per unit, marking a 43.9% increase.

According to the BBC, the wholesale price on October 19 was 182.71p per therm. However, that has risen to 226.24p per therm today.

Under the framework agreed by Tynwald earlier this year, tariffs are reviewed twice a year, although if prices jump by more than 10% then CURA is able to launch a review as it sees fit.

That point was reached on Wednesday when CURA triggered a review of prices, saying it ‘ believes that due to recent price movements on the wholesale gas commodity market and in particular for future contract prices for the remainder of 2022 a reduction of tariffs may be warranted’.

CURA said: ‘ The authority last reviewed tariffs in August 2022 and at that stage forward commodity prices for winter 2022 were significantly higher than they are now.

‘This is the first triggered review under the new framework and the Authority is of the opinion that a sustained downward trend must be established. Market conditions remain volatile and there is no long term certainty, although indications are that wholesale prices are likely to remain lower for a sustained period of time.’

While this may seem like an early Christmas present from CURA, the authority has made clear that it needs to balance the stability of tariffs.

As part of this review, it has asked Isle of Man Energy (the artists formerly known as Manx Gas) to give it the info it needs to carry out the review.

CURA added: ‘The Authority would like to highlight that under the above regulations the overall return earned by Isle of Man Energy is restricted and that any excess return is reflected when calculating tariffs in subsequent periods. The key aim of this review is therefore to reduce any likely over recovery so that subsequent period adjustments are kept to a minimum.’