GAS bills in Jersey will temporarily increase next month due to the war in the Middle East, Island Energy has said.
The firm said that while the global price of gas has fluctuated since the war began earlier this month, the ongoing “situation in the Strait of Hormuz” and “attacks on gas facilities in the region” has caused prices to “rise dramatically”.
As a result, it has decided a temporary increase of 1.2 ppkWh will be applied to bills from 7 April – which a spokesperson for the company said is equivalent to a 5% increase on an average home’s tariff, although this will vary depending on different tariffs.
Island Energy chief executive Graeme Millar said: “We’ve been watching the ongoing conflict closely and, despite our hopes that prices would settle, the picture remained concerning.
“With much of the global oil and liquid natural gas market passing through the narrow Strait of Hormuz, the conflict-related volatility has caused a steep rise in wholesale cost of gas and is a direct pass-through of the amount we are now paying to secure supply.”
He added that the company is “not making additional profit” from this “temporary adjustment”, adding its hedging strategy – where it buys future volumes at pre-agreed prices – has helped limit the extent of the increase and shielded customers from “even greater instability”.
“However, it is important to be clear and transparent,” Mr Millar continued. “If wholesale prices remain elevated as our hedged contracts expire, further price increases will be necessary.
“We are watching the situation very closely and sincerely hope prices begin to ease, but the reality is that reductions can only be considered when wholesale rates fall back toward pre-conflict levels.
“Only when sustained and genuine cost decreases occur can we safely reduce tariffs without risking instability in the future.”
