The cost-of-living crisis bites as gas prices nearly double in a year…

For some time now, the media has been awash with the narrative on the increasing cost-of-living, with gas supply restricted by Russia’s war in Ukraine compounding already increasing wholesale prices. As such, NI’s gas providers have begun to pass this on to customers. Thousands of others across NI will have received their latest gas bills today and without a doubt would have made for eye watering reading.

The figure below shows a quarterly house bill in Belfast with seasonal fluctuations in usage and associated cost reflecting standard autumn-winter and spring-summer trends.

 

The 2022 bill for the quarter leading up to April was £427 compared to £224 in the previous year; an increase of £203. This is as a result of several sequential price rises announced by Firmus, each of them increasing the cost by over 30%. Just like compound interest, these increases are systematically eating away at people’s essential and disposable incomes.

In real terms, despite the KWh used in 2022 being only 5.5% higher than in the same period in 2021, at the original price it should have cost around £237 but has now increased by around 90% to £427. In fact, the daily rate for gas utilised by this particular user between Jan-Apr 2021 was £2.46; this leapt to £4.85 per day between Jan-Apr 22. So, as a rough planning metric, at current prices it is expected that this user will spend almost £5 per day to heat their home during the coldest months of the year; that is not taking into account future planned price rises which would increase this further.

Looking at this another way, the total gas bill for this user from Jan 21-Jan 22 was £491. Their bill for Jan-Apr 22 alone was £427. Over the remainder of the year and based on historic gas usage, current prices suggest that this user is expected to face a minimum outlay of £880 in total for their gas between Jan 22-Jan 23.

Ofgem observes that retail price regulation in NI does not place a cap on the price companies can charge for gas within the market as a whole. So, the limited options available to NI customers are to switch to a competitor offering a lower tariff, adjust their gas usage downwards, hop up warm, continue to pay whatever prices gas companies want to charge, and/or elect the party that has a cogent plan to deal with the cost-of-living crisis that theoretically has no ceiling under the current NI system. The warmer months ahead should provide some respite to those worse affected.

With all major parties starting their election campaigning with the cost-of-living crisis as their central focus, I suggest that anyone who has any political canvassers stop by their house, drill them on their plan to get prices under control.

That is whilst remembering that the DUP withdrew their First Minister in Feb 22 which disabled the Executive’s ability to set a budget that could have already eased spiralling costs. So far, the SDLP has successfully proposed a £200 fuel payment that Sinn Fein’s Minister for Communities has executed, which will be much welcomed by those eligible. The UUP has called for this to be extended and a whole-of-government approach via a Task Force to be instituted immediately after the 5 May election, without advancing any specific policy positions, and the Alliance Party has gone the extra mile and actually published a policy document to tackle the rising costs at NI and UK government levels.

What is sure, is that as the 5 May draws nearer, all parties will likely pledge more and more undeliverable promises to desperately sway voters. So, with that in mind, just be sure to declare your first preference vote for the party that actually has some form for substantiating its actions to date; I suggest some have more than others.

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