OPINION ON SUNDAY: Gas customers kept in the dark for far too long

THE General Consumer Council has described the staggering 20 per cent increase in household gas bills announced by Phoenix Natural Gas on Friday as a bitter blow for consumers. It comes on top of a 10.8 per cent rise in October 2003. The combined impact of these increases means the average Phoenix customer will now be paying between pounds 71 and pounds 170 extra a year for their gas.

Here, Eleanor Gill, Chief Executive of the General Consumer Council tells of the unexpected nature of the announcement and what it really means for consumers in Northern Ireland.

"A SECOND hike in gas bills in the last six months comes as a nasty and unexpected surprise to Phoenix Natural Gas's 62,000 domestic customers. We are very disappointed that both the Council and customers have been kept in the dark about a price issue that has been going on for the last year. Greater openness and transparency from Phoenix is required.

"While we understand that our gas bills are subject to worldwide gas costs, the Council has a real concern that the sheer scale of this increase will undermine consumer confidence in the gas industry at a time when we are all committed to encouraging its expansion here.

"The General Consumer Council recognises that Phoenix has made ongoing efforts to tackle the unreasonable gas cost increase request from its supplier, Centrica. However, the situation still raises a number of questions for the Council, which should be investigated by OFREG (the regulator) and the Department for Enterprise, Trade and Investment:

Is there any means by which Centrica can be challenged to justify its decision?;

Why should customers be paying so much up front for a deal, which has yet to be struck between Phoenix and Centrica?;

Are domestic and small business customers shouldering the burden of this increase and therefore subsidising big business?;

Having been sold price stability, why have customers who have signed up in the last year not been advised of the risk of increased gas cost price?;

Who is going to monitor the final deal to ensure that customers are not overpaying in the long term?"

With one in three gas customers living on less than pounds 135 per week, the Council believes that efforts to tackle the scourge of fuel poverty here could also be affected by the increase.

In Northern Ireland, one in three households are suffering fuel poverty - by far the worst affected region in the UK. A number of these vulnerable people live in the 22,000 Housing Executive properties which have been converted to natural gas.

The General Consumer Council supports the development of the gas industry here and recognises its importance to the energy market and Northern Ireland economy as a whole.

Calling for future price clarity and certainty, Eleanor Gill added: "Now more than ever, Phoenix needs to give a positive gas price commitment for the future.

"While we recognise that about a half of our gas bill is subject to the volatility of wholesale gas costs, the other half of the bill can be regulated and controlled.

"At the time of the October 2003 price increase, the Council called on Phoenix and the regulator to agree an open, transparent and sustainable pricing policy which would give some certainty to existing and new gas customers.

"Much to the consumer detriment, no deal has been struck and today local gas customers are facing a huge increase in their bills and more uncertainty in the future.

"Today we are urging Phoenix to agree a deal with the regulator to restore much needed consumer confidence in gas. This is the least the consumer deserves in a market place where there is only one gas supplier and they cannot shop around for a better deal."

The Council is advising consumers to carefully consider the various heating fuels on offer to them.

They should weigh up all the factors involved - running and maintenance costs, ease and cost of conversion, payment methods, installer choice, environmental aspects and convenience.

The Council is also encouraging consumers to make savings where they can by being more energy efficient.

Relevant, expert advice is available by contacting the Energy Efficiency Advice Centre on 0800 512 012.

Consumer confidence and trust is key to a successful and expanding gas market. The Council is calling on all those with a part to play to urgently clarify the situation for gas consumers - existing and future.

The General Consumer Council is an independent consumer organisation, working to bring about change to benefit Northern Ireland's consumers. The Council campaigns for high standards of service and protection and a fair deal for all. It also carries out research, gives advice and publishes reports and other publications. It deals with individual complaints about electricity, natural gas, coal and passenger transport.

For more information, visit our website at www.gccni.org.uk or www.gccni.org.uk

(Figures are based on average customers in the three payment method categories, pre-payment, credit and direct debit).

Copyright 2004 MGN LTD
Provided by ProQuest Information and Learning Company. All rights Reserved.