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Cash strapped Bord Gáis announces massive energy price hike with gas bills set to rise by €350

The increases will add around €350 a year to the average household’s annual gas bill, and €340 to the average annual electricity bill.

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Huge electricity and gas price rises have been announced by Bord Gáis.

Huge electricity and gas price rises have been announced by Bord Gáis.

Huge electricity and gas price rises have been announced by Bord Gáis.

BORD Gáis has become the first energy provider to announce a price rise this year, with massive rises coming next month.

The company is increasing the average electricity bill by 27pc and the average gas bill by 39pc from April 15.

The increases will add around €350 a year to the average household’s annual gas bill, and €340 to the average annual electricity bill.

But this comes on the back of price hikes that have added around €540 to people’s gas and electricity bills since the autumn of 2020.

Bord Gáis raised electricity prices three times last year, and gas prices twice.

Taoiseach Micheál Martin today admitted that the price hikes will hit the poorest families the hardest.

However, reacting to massive price hikes, Minister Ryan said that the Government cannot help with every price hike.

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Transport Minister Eamon Ryan. Photo: Gareth Chaney/Collins

Transport Minister Eamon Ryan. Photo: Gareth Chaney/Collins

Transport Minister Eamon Ryan. Photo: Gareth Chaney/Collins

“We can’t cover every single cost increase,” said Minister Ryan.

“The most important measure is to try and start reducing our usage of these fuels. Switching into the spring will help, use of gas will naturally fall in the heating sector.”

Minister Ryan was speaking to reporters in Washington DC, where the Taoiseach said that the “entire population” cannot be shielded from the impact of the war in Ukraine.

“Certainly we can’t shield the entire population from the entire impact of this war,” he said.

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“We will do everything we can to protect those on lowest incomes and those under the most pressure.

“The idea that we can continue to produce a €1bn package every two weeks… there are limits to what government can do, is what I’m saying.”

“Governments will not be able to shield citizens entirely from this shock. It’s a new reality, it’s a reality brought about by war on the continent on Europe,” he added.

The Government has said it will examine what other measures may be possible to support consumers and businesses in the wake of the Bord Gais hike.

The European Commission is due to report back on any possible reductions to VAT or further cuts to rising gas or fuel prices by the end of the month, has said.

The Commission is then expected to bring forward proposals by the end of May and Mr Martin said that the Irish Government pushed for “greater flexibility” for the EU’s energy and VAT directives.

Environment Minister Eamon Ryan is understood to have informed ministers of the price hike shortly before it was announced publicly at the Cabinet meeting which took place virtually today as ministers are scattered worldwide for St Patrick’s Day.

In a statement issued afterwards, the Government said it will keep energy supply and prices “under close and active review and examine what other measures may be possible to support consumers and businesses”.

The Government said it has already raised the possibility of lowering VAT on fuel below its current lower rate of 13.5pc with the European Commission.

“The significant retail price increases announced today by Bord Gáis Energy are a matter of strong concern to the Government, particularly the impact on low-income households. Russia’s invasion of Ukraine has seen unprecedented levels of price increases and volatility in energy markets,” the statement said.

The statement noted that the Coalition has already taken a number of actions to ease the impact of price increases including the €125 increase in the fuel allowance which is being paid to 372,000 households this week; the €5 increase in the weekly fuel allowance along with a €5 increase in the Living Alone Allowance and Qualified Adult payment; cuts of 15 and 20 cents per litre in excise on petrol and diesel; and the €200 electricity credit.

Meanwhile, the Tánaiste will convene a meeting of the Enterprise Forum tomorrow to hear how the war in Ukraine is affecting businesses in terms of energy costs and disruption to supply chains.

The Enterprise Forum comprises bodies representing small to large businesses, retail, food supply, manufacturing and foreign direct investment with a spokesman for Leo Varadkar saying it was a "valuable channel for engaging with business on Brexit and Covid issues".

The punishing price hike comes after global gas and oil prices have surged after the Russian assault on Ukraine, although crude oil prices have since fallen back to their pre-war level.

Bord Gáis said it recognises that the increases will put a massive strain on household budgets.

It is putting place additional supports and services to help working in partnership with the Money Advice and Budgeting Service (MABS) and other charities.

Managing director with Bord Gáis Energy Dave Kirwan, said: “We know that today’s announcement is not welcome news. As part of Centrica plc, and with decades of local experience, we will navigate through these unprecedented times with our customers.”

He said there have been continued increases in wholesale energy costs over the past two years, particularly in the past 12 months.

“This, together with the expectation that costs will remain both high and volatile for some time, means we are forced to increase our prices.”

He said the company was putting in place an energy support fund of €1.25m in addition to the services we already have in place.”

The level of increases from Bord Gáis are far in excess of what had been expected. Some experts were expecting most energy supplies to announce rises of 10pc.

It comes after 35 different price rise announcements last year.

Inflation is running at a 21-year high of 5.6pc.

In 2020 the average electricity bill was around €1,100, but is now around €1,500, a rise of €400 before the latest Bord Gáis rise.

Two years ago the average annual gas bill was around €800, but is now around €1,200, up €400.

Daragh Cassidy of price comparison site Bonkers.ie said the news from Bord Gáis is unsurprising given the huge increase in the price of gas that we have seen on wholesale markets in recent months.

However, the size and scale of the increase is unprecedented, he said.

Mr Cassidy said it was the first price hike announcement from any energy supplier this year.

Last year there were over 35. And more suppliers are certain to follow, he said.

“The outlook is bleak for energy customers,” the Bonkerse.ie executive said.

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