The cost of running your home in Northern Ireland
During 2008, consumers in Northern Ireland witnessed just how unpredictable energy prices can be. Crude oil reached a peak price of $147 per barrel in July 2008. Consumers were hit with two electricity price hikes while those living in the Greater Belfast Area were hit with two natural gas price hikes. The New Year brought some welcome relief when Northern Ireland Electricity Energy (NIEE) and Phoenix Natural Gas both reduced their prices. However it wasn’t good news for everyone as firmus energy introduced their first price increase in three years. These events reminded us how volatile energy prices are and demonstrated how the price of energy has a significant impact on our household budgets.
While recent decreases in prices are good news, many consumers in Northern Ireland are still paying more for energy than they were this time last year. NIEE customers are paying 36 per cent more, Phoenix Supply Ltd customers are paying 19 per cent more and firmus energy customers are paying 20.7 per cent more. In contrast, the price of home heating oil is down 22 per cent from this time last year.
What are the impacts of rising costs on consumers?
The impact of high prices on consumers is stark – particularly in Northern Ireland where many are struggling financially. Many consumers have already had to make hard choices.
The plight of consumers in Northern Ireland is clear:
∑ More people have been plunged into fuel poverty as a result of increased energy prices;
∑ Lower earnings than UK average;
∑ Higher benefits dependency;
∑ Almost half of households struggling to pay bills.
What is being done to help?
In December 2008, The Office of the First Minister and deputy First Minister announced they would give £150 to each household on pension credit and income support.. However, longer term action is needed to protect consumers against the instability of wholesale energy costs.
What the Consumer Council thinks should be done to help
Every option must be explored to develop and deliver special lower energy tariffs for vulnerable people who simply cannot afford to pay their energy bills and who need to keep warm and well. Consumers should not have to make decisions on how they use their energy which could be detrimental to their health.
In addition, the Consumer Council believes the Winter Fuel Payment must be overhauled because it is not given to everyone who needs it and there is no targeted approach to how it is given out. The level of the winter fuel payment remained at £200 between 2003 and 2008 but it increased to £250 in 2008. This was very welcome however if the winter fuel payment increased in line with oil prices, it should have risen to £328.
The Consumer Council is committed to working with our politicians and with the Utility Regulator to tackle this issue and deliver solutions to help people cope with high energy prices. Some action has been taken but long term solutions are required to help Northern Ireland consumers during these tough times.
Our snapshot survey showed average price of 900 litres of oil on 11 February 2008 was £386, on 11 February 2009 it was £303
Office for National Statistics, 2008 Annual Survey of Hours and Earnings, 14 November 2008
Family Resources Survey, 2006/07
Managing Money, How Does Northern Ireland Add Up?, The Consumer Council, 2007