Business
Gas Tariffs Fixed Until January
Demand for the year to date was significantly lower than anticipated in February
Gas tariffs will remain at their current rate for the rest of the year after a review by the industry regulator.
Barring a massive swing in the price of gas, the Communications and Utilities Regulatory Authority has said prices should remain fixed at 13.98p per unit.
CURA said: ‘The Authority’s review took into account forward purchase commitments, and demand assumptions, made by Isle of Man Energy and then actual demand and prices paid for gas which was not covered by those forward agreements. It should be noted that market prices in December 2022, when the forward purchases were made, were significantly higher than they are now. The Authority also notes that forward purchases are primarily made by utility providers to ensure tariff stability, not to secure the best value.
‘The review found that current projected blended commodity costs1 per unit for the full year are lower than what was projected when the last review for the current tariff period was carried out in February meaning that the commodity cost element of current tariffs is too high.
‘The review also found that demand for the year to date was significantly lower than anticipated in February, this is important as the Authority in effect divides the cost of running the network across the total units of gas it is estimated would be used in the year. Lower demand means that the overall cost of operating the network is not covered by current tariff levels and that this cost element of tariffs is too low.’
