SSE Airtricity gas price hike 19% from Oct 1

SSE Airtricity will increase its gas prices by almost 19% from 1 October. The rise affects 200,000 domestic and small business customers across Northern Ireland, according to a BBC report.

It means the annual gas bill for a typical household in the greater Belfast and west gas network areas will increase by almost £172. The company cited unprecedented volatility in global energy markets and higher wholesale gas prices as the cause.

Reason for the increase

Colin Broomfield from the Utility Regulator said the increase would be difficult news for many. He stated the main reason is the sustained rise in wholesale gas costs due to the ongoing Middle East conflict.

"The Iranian conflict has continued to impact energy prices globally for the past six months," Broomfield said. "In recent weeks, we have seen the wholesale price of gas reaching 169 pence per therm. This is twice as high as pre-conflict prices."

Wholesale gas prices in the UK have effectively doubled since the US and Israel began their attack on Iran. The conflict closed the Strait of Hormuz, a key water transport route, limiting global supplies. About 20% of the world's oil and liquefied natural gas normally passes through that waterway.

Impact on consumers and businesses

Raymond Gormley, head of energy policy at the Consumer Council for Northern Ireland, called 19.2% a significant amount. "We knew this was going to be a big number and it comes in around where we would have expected," he said.

Gormley provided a comparison with other regions. He said Northern Ireland is about £60 more expensive for gas than the rest of the UK, but a few hundred pounds cheaper than the Republic of Ireland.

Small business owner Glenn Davis said energy price rises were putting a lot of pressure on his restaurant, The Upper Crust in Larne. His gas bill is about £400 and he pays about £500 a week for electricity. "It is getting hard to contend with," he said.

Public reaction and government schemes

Customer Isobel Russell from Larne said the prices put a lot of pressure on her. She lives alone and her husband is in a care home. "I have to put most of his money into the care home, which doesn't leave me with a lot," she said.

Both Russell and another customer, Gawn Graham, suggested expanding North Sea drilling. Graham said the UK should look after its own energy first. Russell called for more support from Stormont for people struggling.

A Stormont scheme will give eligible households a £100 voucher towards home heating oil costs next month. A separate scheme will give all households around £50 off their electricity bills in October.

Gormley noted the UK is heavily reliant on oil and gas imports, with most coming from the US and Norway. Although the UK gets some oil from the North Sea, most is exported for refining elsewhere. The global market price determines what the UK pays.