It used to be said that the only certainties in life were taxes and death. To that can now be added rising utility bills. Following the 39% increase in gas prices announced by Phoenix Gas earlier this year comes a 19% rise in electricity charges by Power NI. The wholesale cost of fuel has been cited as the reason for both increases, but the electricity increase is particularly galling as it comes at a time when the price of oil - used for some power generation - has fallen by 20%.
While Power NI argues that it has frozen prices for three years in the face of increases in the wholesale market, consumers are not convinced of its altruism. They can validly point out that the utility company has been making a substantial profit during this period - £11m before tax according to the latest figures - and it would be interesting to be able to view current and projected profits following this latest tariff increase.
There is no escaping the impact of the electricity price increase, especially for those on low incomes. They will find a greater proportion of their budget going on cooking, heating and lighting costs and there is no doubt that some people will face the unenviable choice of either reducing their power use or their food purchases. Businesses, already facing hard times because of the recession, will also find their overheads increasing making more closures likely.
While price increases of this magnitude are never palatable, they could be accepted as a short-term measure if consumers were assured that prices would fall again as soon as global factors such as the wholesale price of fuel mitigated. However bitter experience has shown that utility companies are much more reluctant to lower tariffs than to increase them. The only slight ray of hope is that there is now limited competition for both gas and power supplies and consumers can make some savings by switching utility companies.