Northern Ireland cost of living: Consumer Council issues new warning about winter energy costs

World energy prices spiked after the Russian invasion of Ukraine but although they have now reduced substantially, the removal of the government subsidy means NI consumer prices will actually increase.

Consumer Council Director of Infrastructure and Sustainability, Peter McClenaghan, said: “On 1 July 2023, the Government reduced to zero the Energy Price Guarantee (EPG) that was subsidising natural gas and electricity prices in Northern Ireland. This means our prices now reflect the actual wholesale market price of energy. Consequently, consumer bills are around twice the amount we paid before the COVID-19 pandemic.

"We anticipate that energy prices will continue to remain high as wholesale natural gas for winter 2023 is currently trading over three times the pre-pandemic norm. This will also mean our electricity bills will stay higher than normal as natural gas is used to help make our electricity.

"Additionally, as supply remains tight in the global natural gas market incidents that create surprises on the market could lead to further price spikes, as happened frequently over the last 18 months."

He added that the Government's EPG subsidy mechanism will remain in place until April 2024 and the government whether it is needed again every three months.

"So, if energy prices significantly increase this winter, the Consumer Council will make the argument to the Government that they should reinstate a subsidy.”

Last week the consumer watchdog says that standard tariff customers of electricity with SSE Airtricity, Electric Ireland and Budget Energy, will see their average bills rise by around £127 per year. Customers of the regulated supplier, Power NI, will see a typical bill increase by around £49 though Click Energy Customers will see no increase in their typical yearly bills.

For gas prices, SSE Airtricity announced their gas bills will increase by around £134 a year. Firmus energy customers will see their bills increase by around £328 in both the Ten Towns gas network and the Greater Belfast gas network areas.

The head of the International Energy Agency, Fatih Birol, also warned energy prices could spike this winter – and once again force governments to step in and subsidise bills.If the Chinese economy strengthens quickly and there is a harsh winter, gas prices could rise, putting pressure on consumers, Fatih Birol said.The IEA is an international agency that provides data, analysis and recommends policies.Mr Birol told the BBC that many European governments made "strategic mistakes", including an over-reliance on Russia for energy, and that foreign policy had been "blindfolded" by short-term commercial decisions.He said this winter "we cannot rule out" another spike in gas prices."In a scenario where the Chinese economy is very strong, buys a lot of energy from the markets, and we have a harsh winter, we may see strong upward pressure under natural gas prices, which in turn will put an extra burden on consumers," he said.