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07th April 2004

COUNCIL WELCOMES REGULATOR'S REPORT ON GAS CRISIS

<p>The General Consumer Council today welcomed the report issued by the Northern Ireland Authority for Energy Regulation into the ongoing Phoenix gas price increase issue.</p>

Gas customers here have faced two significant rises in the last six months – 10.8 per cent in October 2003 and 20 per cent in April 2004.

Eleanor Gill, Chief Executive of the Council, commented:

“The General Consumer Council welcomes the Authority's comprehensive and impartial report which tackles a very complex and changing situation.

“Consumer confidence in the gas industry here has never been lower and yet it is the key to its growth and sustainability.  Without doubt, last week was a bad week for Phoenix gas customers not only with the imposition of a 31 per cent price increase in six months, but also in the insensitive way in which the news was communicated to gas customers.  The challenge for Phoenix is to address and restore consumer confidence and to ensure that no further damage is caused to the wider gas industry here.

“This report highlights a number of serious issues that need to be urgently addressed. These issues relate not only to the wholesale cost of gas, but also the need to ensure a long-term gas price commitment that strikes the right and fair balance between consumer and shareholder interests.  Phoenix and its gas supplier must both show restraint and reassess their expectations in a region where one in three homes suffer fuel poverty.

“Phoenix must respond to the united call from the Regulator, politicians, the Consumer Council and gas customers themselves to withdraw this price increase for two months until the issues raised in the report are properly and transparently resolved for the good of existing and prospective Northern Ireland gas users.”

The General Consumer Council believes that the regulatory and licensing structures must be strengthened particularly since gas customers here cannot shop around different gas suppliers to get a better deal.  Eleanor Gill continued:

“It is startling that no-one had the power to stop Phoenix imposing this gas increase on 1 April 2004 despite very real concerns about its application and adverse impact on the 62,000 domestic gas customers.  It is obvious that we are suffering from a lack of competition in the market place.  Would any other energy company in the rest of the UK have raised prices by 31 per cent in six months?  How can a proposed increase jump from 10 per cent to 20 per cent in one week?  Why should customers have to act as credit agents for Phoenix or any other company?”

The General Consumer Council will continue to play its part with other stakeholders to ensure that consumer interests are protected and much-needed consumer confidence and a growing gas industry are restored.

ENDS

  1. General Consumer Council media contact: Susie Brown, telephone, 028 9067 4807 or e-mail, [email protected]
  2. 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.
  3. For more information, visit our website at www.gccni.org.uk
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