SSE Airtricity to increase gas prices by 19% from October

Northern Ireland's largest provider of natural gas, SSE Airtricity, is to increase its prices by almost 19% from 1 October for its 200,000 domestic and small business customers.

It means the annual gas bill of a typical household in the greater Belfast and west gas network areas will increase by almost £172.

The company said "unprecedented levels of volatility in global energy markets and higher wholesale gas prices" had led to the price rise.

Wholesale gas prices in the UK have effectively doubled since the US and Israel began their attack on Iran.

Colin Broomfield from the Utility Regulator said the increase would be "difficult news for many households and small businesses, particularly at a time when wider cost pressures remain a concern".

"The main reason for the increase is the sustained rise in the wholesale cost of gas, due to the ongoing conflict in the Middle East.

"The Iranian conflict has continued to impact energy prices globally for the past six months.

"In recent weeks, we have seen the wholesale price of gas reaching 169 pence per therm. This is twice as high as pre-conflict prices."

The Middle East conflict sent global oil prices soaring as it effectively closed the Strait of Hormuz - one of the world's key water transport routes for oil, liquid natural gas and other essential commodities - limiting global supplies.

About 20% of the world's oil and liquefied natural gas normally passes through the waterway.

The UK is heavily reliant on oil and gas imports, with the majority coming from the US and Norway.

The price of oil on the global market determines how much the UK pays for it.

Although the UK does get some oil from the North Sea, most of that is exported for refining elsewhere.

Consumer Council for Northern Ireland head of energy policy Raymond Gormley said 19.2% is "a significant amount".

"We know electricity prices went up earlier this year and oil prices are high, so it will be a tough time for consumers.

"We knew SSE didn't put their prices up during the summer, so we knew this was going to be a big number and it comes in around where we would have expected."

Gormley said there are a number of reasons for the increase, with the conflict in the Middle East being a huge factor.

"At the end of the day, before the conflict in Iran, gas prices were about 80p a therm and it is now more than double that, so we knew it was going to be a big number. It didn't come as a surprise to us, but it will be a shock to consumers."

"That area is a major oil and gas producer, so when those ships are being curtailed in the Strait of Hormuz, they are not getting out to their destinations. That means everyone is feeling the pinch and everyone else is competing for oil and gas."

Gormley said the utility regulator has done a comparison with the rest of the UK and the Republic of Ireland, and he says comparatively "we are about £60 more expensive than the rest of the UK, but about we are a few hundred pund cheaper than the Republic of Ireland".