Lots of annoucements from Bord Gais and the Energy Regulator today about an 8 % drop in gas prices from February 8th next. Just in time for the warm up so!
In the news about the price decrease however there has been little mention about the fact we’ll all be paying a lot more for home heating oil or gas from May 1. As a result of Budget 2010 a carbon tax of €15 per ton will be applied. The ESRI estimates that this will cost households €2-€3 per week. The regulator giveth with one hand and the Government taketh with the other.
Including the two price reductions in 2009 (May and October), the average customer will save about €4.99 per week (http://tinyurl.com/yatt3zx), and that’s only on gas. Electricity customers can easily make saving too, thanks to Airtricity and BG entering the market.
Add to that the fact that the majority of the revenue generated by the carbon tax will go to energy efficiency grants, rural transport, improving fuel efficiency in low-income households (see Annex E of the 2010 Budget), and towards alleviating fuel poverty, I think it’s a pretty good deal, really.
The carbon tax won’t apply to heating bills until after the next budget – and even then it may not occur – so your Bord Gais bill won’t be affected by the carbon tax.
To be fair, there is two substantially different mechanisms at work here. The carbon tax is a progressive, forward-thinking tax, designed to dis-incentivise carbon-intensive activities such as driving. On the other hand, Bord Gais have made the surprising undertaking to unilaterally reduce their already-inflated prices, and they should be commended for that – if only the ESB would follow their lead, we’d be laughing.
Surely, it’s just a decrease followed later on by an well flagged increase? I don’t see the introduction of a carbon tax as negating the Bord Gais decrease.
Dave it’s coming in on May 1 of this year. and it’s not Bord Gaid making the decision – it’s the regulator.
I’m refering to the way in which ordinary consumers may view this – one might spin it all they like but I don’t think the carbon tax on home heating has been well flagged at all. The good news of fuel cost reductions mentioned everywhere yesterday with few if any referring to the fact that fuel costs will rise again in 4 months.
Well, yeah, the regulator made the decision – but it was requested by Bord Gais. It’s the third time in the past year they’ve made reductions, and in stark contrast to the behaviour of the semi-state energy companies over the past decade, but obviously revealing about the inflated margins they’ve been operating with.
You make a good point about the lazy reporting of the good news, but I would still be sceptical about the government’s stomach for approving a substantial increase in home heating costs. It would be the wrong decision, but our government is brilliant at those.