Islanders will temporarily pay more for their gas bills next month due to the war in the Middle East.
Island Energy confirmed there will be a 1.2 ppkWh increase applied to bills from 7 April – equivalent to a 5% increase on an average home’s tariff, although this will vary depending on different tariffs.
The utility company said the decision was made due to the ongoing “situation in the Strait of Hormuz” and “attacks on gas facilities in the region”, causing prices to “rise dramatically”.
Chief executive Graeme Millar explained that this is because much of the global oil and liquid natural gas market passes through the narrow Strait of Hormuz.
“The conflict-related volatility has caused a steep rise in the wholesale cost of gas and is a direct pass-through of the amount we are now paying to secure supply,” he said.
Despite “hopes prices would settle”, he said the picture has “remained concerning”.
Mr Millar emphasised that the company is “not making additional profit” from this “temporary adjustment”.
He added that its hedging strategy – buying future volumes at pre-agreed prices – has helped limit the extent of the increase and shielded customers from “even greater instability”.
However, Mr Millar said “it is important to be clear and transparent” that “if wholesale prices remain elevated” as its hedged contracts expire, “future price increases will be necessary”.
“We are watching the situation very closely and sincerely hope prices begin to ease, but the reality is that reductions can only be considered when wholesale rates fall back toward pre-conflict levels,” he added.
“Only when sustained and genuine cost decreases occur can we safely reduce tariffs without risking instability in the future.”
The company has written to business and domestic customers to inform them directly about the changes to their bills and to advise them to contact Island Energy’s customer team should they need any help.
The Jersey Consumer Council said it will “keep an eye on rising costs and will monitor local prices when the conflict is over and global oil prices have settled down”.
Consumer Council chair Carl Walker is set to join a panel of experts at a live event tomorrow to examine Jersey’s cost-of-living challenges.
The Question Time-style event – called How do you solve a problem like the cost of living crisis? – will take place at the Pomme d’Or Hotel from 6pm on Thursday 26 March.
Mr Walker will be joined on the panel of experts by Chief Minister Lyndon Farnham, Health Minister Tom Binet, and Channel Islands Cooperative chief executive Mark Cox.
The discussion will follow a Question Time format chaired by deputy editor Fiona Potigny, with the discussion driven by questions submitted by the public.
The previous All Island Media events on housing and population last year were sell-outs.
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