Deputy pushes for lower Jersey Gas prices

Deputy Geoff Southern says he will soon be lodging a proposition calling on the Economic Development Minister or Treasury Minister to open discussions with Jersey Gas to get the utility company to drop its prices next year.

His comments come after the firm announced that it will be changing its gas charges from January to make the billing structure ‘fairer’ and to spread the cost of domestic central-heating bills more evenly through the year.

Under the new structure central-heating customers will see an increase in the standing charge they pay – dependent on what band they are placed in, which is based on the volume of gas they use – but a decrease in the cost per unit of gas to 8.79 pence per unit.

Jersey Gas said that although the majority of customers would see ‘little change’ in their bills, some would see them rise.

Deputy Southern said that some Islanders were ‘worried’ by the announcement, adding that he had advised one woman who feared her gas bill was going to soar to get in touch with Jersey Gas.

In March, Jersey Gas announced that it would drop its gas prices by 3.5 per cent because of an ‘unprecedented fall’ in wholesale energy costs in 2014, which had enabled the company to renegotiate prices that were already in place.

Although his proposition lodged after the March announcement, which called for a review of gas tariffs, failed earlier this year, Deputy Southern said that he would be lodging another to address the ‘issue’ shortly.

‘Wholesale gas prices have come down by something like a third,’ he said.

‘I would have thought there was plenty of scope for reductions in prices overall, leaving the customer happier and leaving the gas company making a profit.

‘I will be working on a proposition to request the Economic Development Minister or the Treasury Minister to open negotiations with the gas company with a view to ensuring we get a price drop in the new year.’

‘That takes out any fluctuations.

‘It protects the customers when prices go up.’

Mr Davies would not disclose the next time Jersey Gas would be forward-purchasing LPG.

He said that comparisons between gas prices in the UK, which uses natural gas, and Jersey, which uses LPG, was not possible.

He said that LPG was more expensive because of importation and manufacturing charges.

Today marks a significant victory for people power in Jersey.

In January, Jersey Gas said no to calls in the media and from consumers to cut its prices following a sharp fall in the wholesale price of oil.

The utility company, which is owned by an Australian investment fund, said that it was not possible to change tariffs until at least the end of 2015 because it had already contracted to buy gas for the year at a fixed price. The comments came as UK gas suppliers were announcing price cuts.

Were Jersey consumers yet again being held to ransom by a corporation exploiting a captive market?

Today, Jersey Gas announced that it was reducing prices by 3.5 per cent from next week.

What a difference a couple of months makes. So what changed?

The matter-of-fact press release issued by Jersey Gas this morning certainly offers no help.

The answer is that an Island company has been forced to bow to public and political pressure against a background of price cuts elsewhere.

The Council of Ministers, and in particular Senator Philip Ozouf, have been pressing for a better deal for consumers across the energy sector. Their work has been complemented by backbenchers, including Deputy Geoff Southern, who tabled a proposition calling for the States to exercise its right under Article 93 of the Jersey Gas Company Law to regulate pricing.

This work – together with calls from the JEP, which first highlighted the power of the States to step in, and its readers on the letters pages of the newspaper – has helped to secure an important victory for consumers.

That victory was to get a company quick to say no to consumers to do something in their interests. As far as prices go, it is a small concession. Even after 23 March, Islanders will still be paying too much for their gas.

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