13.2% hike in gas prices as energy crisis deepens

JERSEY Gas customers are facing a 13.2% price hike in a move which could lead to rising costs for services across the Island.

Picture: PA (31733634)
Picture: PA (31733634)

The increase – announced yesterday amid the escalating European-wide energy crisis which has already seen the collapse of a number of UK providers – will add up to £15 per month onto an average household gas bill.

Age Concern said the hike would ‘make life very difficult for many householders’ this winter.

And Consumer Council chairman Carl Walker warned that the effects of the rise could ripple out through the economy, with many businesses such as hotels, restaurants and gyms being reliant on gas.

The announcement of the price rise followed a warning by Jersey Gas earlier this week that it had seen a 90% rise in costs due to Brexit, Covid, storms and unpredictable weather.

Age Concern vice-chairman Ben Shenton said some Islanders may have to make ‘difficult decisions in terms of spending priorities’ if there was a cold winter. Jersey Gas said the average customer faces a £10 to £15 increase in their monthly bills.

Mr Shenton said: ‘At Age Concern we will be monitoring the situation closely and will expect action and solutions from government for those that find themselves in difficulty.’

The price rise will be reviewed by Islands Energy Group – the parent company of Jersey Gas – in six months. The firm faced criticism after increasing the price by 6.5% in spring last year.

Yesterday, it said it would be dropping prices by 2% but introducing a 15.2% market-linked increase, which Jersey Gas say may be reduced in six months if market conditions allow.

Mr Walker said linking increases to the market was a ‘worrying new approach to pricing gas’. This provided no certainty for the consumer, he said, and could lead to fluctuating bills depending on market conditions.

‘It is really going to hit Islanders pockets this winter,’ he said.

‘There is a very good chance of a wider impact, further than the domestic issues that we are about to see,’ he added.

And Mr Walker said he worried for people in rented accommodation, saying there were many Islanders who had no control of whether they used gas to heat their properties.

He added: ‘It’s a lot more than just households using Jersey Gas.

‘Commercial kitchens and hotels use gas, and gyms – anywhere that uses a tremendous amount of water.’

The government said it would be offering support to struggling Islanders over the winter months.

Infrastructure Minister Kevin Lewis said: ‘We recognise that the price increase will be a concern to many of their customers, and government will ensure that vulnerable Islanders are supported.’

Meanwhile, Social Security Minister, Deputy Judy Martin added: ‘Although only a small proportion of vulnerable Islanders and low-income households rely on gas, we are aware that the price increase will have an impact. I have asked officers to investigate the impact of the price increase and we will be focusing on offering support to those who may struggle over the winter months.’

Reform Jersey leader Senator Sam Mézec said his party was ‘appalled’ at the situation.

‘We are extremely concerned about the impact this may have on people in our society who are facing fuel poverty,’ he said. ‘This will disproportionately affect pensioners and renters, who should not be left this winter having to worry about heating or eating.’

Senator Mézec said the situation ‘may be caused by factors which are outside our control’ but it raised ‘big questions’ about Jersey’s ‘energy security and journey towards carbon neutrality’. He said the States Assembly had the power to set gas tariffs, under a 1989 law, and the government should use the leverage it has ‘to urgently tackle this with the gas company and set out proposals to ensure that we can transition to more environmentally friendly energy delivery, without causing hardship for people on lower incomes in the meantime’.

Islands Energy Group chief executive Jo Cox said: ‘These are not decisions we take lightly but having explored all our options we are left with only this difficult choice.

‘The price of wholesale gas has doubled as energy markets are reacting to a variety of complex influences including a significant number of events across the world, such as Brexit, Covid, storms across America, and unpredictable weather globally. It is a wide range of factors that have combined to affect supply chains in a variety of ways, increasing the cost of many things that are crucial to the supply of gas.’

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