Gas price hike predictionPublished on 23/02/2017
Gas prices are being reviewed by the Energy Regulator and the new tariffs when they're announced will kick in at the beginning of April
We’ll know soon enough what the new costs will be but for what it’s worth here’s my prediction. It’s a very rough and ready calculation.
This time last year the price of gas for delivery this winter (2016) was about 33 pence a therm.
Currently the price of gas for delivery in Winter 17 is 50 pence a therm. That’s a fifty per cent hike.
The wholesale cost of gas makes up a third of the retail price.
It thus follows that a fifty per cent rise in the wholesale price will translate into a 16 or 17 per cent increase in what households and businesses will pay, all things being equal.
Now of course not all gas is bought months and months in advance but day ahead prices are up about fifty per cent too.
So giving myself plenty of room for error, my forecast is that a ten to twenty per cent increase will be announced shortly in the cost off gas for homes and small businesses but don’t hold me to it.