MORE than 500,000 households face a nasty shock from October when their gas bills are set to jump by 34%. Coming on the back of last year's 25% hike, the average Bord Gais bill is now heading for more than 1,200 a year.
The latest increase has yet to get the green light from energy watchdogs, but they seem certain to wave it through given huge upward pressure on gas prices on international markets.
For gas users, who have been told for years that they enjoy one of the cheapest and cleanest fuels available, the time may have finally come to consider the alternatives.
Many already switched from oil as more parts of the country were plugged into the gas network. Is it time they moved back?
After a 15-year price freeze, gas bills started to creep upwards in 2003 and have soared every year since, culminating in a 25% hike from last October. This has sent the average household bill from 595 in 2002 to reach 902 by this year.
Nevertheless, Bord Gais claims to have the competitive edge, with oil costing 30% more than gas to heat the average Irish home. Other energy sources are even more expensive, with coal costing 38% more than gas while homes that rely on electric storage heating pay 51% more.
But the gap will close considerably if Bord Gais gets its latest increase, and it could disappear altogether in the case of home heating oil.
"If we are given the 34% increase we've asked for, it would make us marginally more expensive than oil . . .
assuming oil prices stay where they are now, " says Bord Gais marketing manager Maurice Cullen. "This is a big assumption, and consumers will have to ask themselves what is going to happen to the price of oil between now and October."
Indeed, the price of home heating oil always increases as winter approaches, so that people who delay filling the tank until the cold begins to bite can expect to pay more.
"All projections for oil prices show no reductions in the medium term, " says Tom Noonan, chief executive of Maxol, one of the top distributors of home heating oil.
"The price varies with demand, and demand for heating oil is very low in the summer months. But once winter kicks in, especially in the US, which is a huge consumer of oil, prices will begin creeping up."
Noonan says householders may be able to learn about what to expect from watching no-frills airline Ryanair, which revealed last week that it had locked itself into buying jet fuel at up to $74 a barrel over the coming months, close to the current price of oil on the open market.
"Airlines are sophisticated players in the oil market because fuel is such a big part of their costs, " Noonan says, "and they generally know what they're doing. When you see them hedging at $74 a barrel, you can expect further hardening of prices."
So we know that the price of both gas and home heating oil are going up. But, because oil prices are a moving target, it is impossible to predict which will work out cheapest.
Even if the price advantage over oil is less obvious, Cullen says there are still good reasons for sticking with gas.
"If our price increase goes through, the cost of gas will be fixed until at least October 2007 because we can only review our prices once a year, " he says.
"With oil, the price changes from day to day: just look at what's happening at the petrol pumps. You mightn't notice each individual change, but it's creeping steadily upwards bit by bit."
But this pricing see-saw can also work to the advantage of oil users, according to Noonan. "Unlike gas, which, once it goes up, never comes down again, the price of home heating oil moves in line with wholesale prices, " he says. "Oil prices do go down as well as up."
Oil also gives home owners more control over price, he suggests. "If you convert to gas, you're locked into one supplier . . . typically Bord Gais.
With oil, you can shop around for the best price from the various distributors in your area."
The flip side is that you get what you pay for . . . and there is considerable anecdotal evidence that home owners are being shortchanged by cowboy distributors, who fail to deliver the volumes they charge for or even dupe customers with inferior oil that may have been smuggled.
At least gas users can be sure where their gas is coming from, so long as nobody turns off the tap at the other end of the pipeline in Siberia. And there are other benefits, according to Cullen.
"Gas is always on, so you don't have to phone up and order when supplies are running low. And, unlike oil, you don't have to pay before using gas because we bill customers two months in arrears."
MAYBE IT'S TIME TO GO GREEN THE energy crisis has led thousands of Irish families to consider turning their backs on oil and gas in favour of more energyef"cient alternatives.
The good news is that the government is willing to underwrite the costs of switching to ef"cient energy sources, such as solar panels and wood-burning boilers and stoves, under the new greener homes scheme. The biggest grants of up to 6,500, are available to home owners who install heat pumps that harness the energy in the ground, air and water around their houses.
To get the money, house holders must apply to Sustainable Energy Ireland stating which heating technology they plan to install and who will undertake the work. Despite a "ood of interest in the scheme, SEI says it should be able to grant approval within two weeks of an application being made.
"There's very little reason why an application shouldn't be approved, provided it is for an approved product installed by an approved installer, " said an SEI spokesman.
Before the grant is paid, the home owner must submit an invoice for the work done together with a commissioning report from the installer involved.
Payment by electronic transfer to the home owner's bank account should be received within two weeks of the paperwork being sent to the SEI.
For more information log on to www. sei. ie
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