Gardiner says public have a right to know about NIE’s Gas Purchasing Strategies
Sunday, January 29th, 2006
Samuel Gardiner MLA, Ulster Unionist Assemblyman for Upper Bann said today that he wanted NIE and the Electricity Regulator to explain to the public in detail exactly how much of the electricity price hike was due to world gas price increases. The MLA believes that consumers have a right to know if gas could have been bought more cheaply if there was a better purchasing policy,
“The energy market is extremely complex and the price of energy varies considerably from one month to the next. Oil prices, for example, have been unstable recently due to the political circumstances in Iran and Nigeria. In the last year, Oil has moved between $50 and $68 a barrel. That is a variation of well over 20%. So a lot depends on market conditions when you buy your fuel. I have concerns that NIE may not be purchasing fuel at the most advantageous time. I think the public has a right to know details like this if they are being asked to pay a double figure increase.”
It is true that in 2003 gas prices went up by 18 per cent, in 2004 they rose by 12 per cent and this year they increased by 15 per cent. I have a suspicion that not all of these increases were really fully necessary. I suspect that at least some of these increases are hard-wired into the system and part and parcel of all the electricity supply companies internal financial planning. There is no underlying problem with gas supply and no real increase in demand or supply which cannot be predicted well ahead of time. We have known for 6 months now that this was likely to be a harder winter than usual. The meteorologists have been quite clear about that. So supply problems are more apparent than real.”
“There’s a lot of fear in the world gas market which leads to panic buying. The market is not working effectively and it is costing the consumer and businesses billions. The gas market suffers from too little competition. In 1999 there were 22 suppliers. Now, there are only six, most of them owning and controlling large parts of the supply chain.”
“Some of the people who are suffering most are schools, local government, hospitals and libraries. They are in serious trouble because they can’t get the extra money. In addition older people on fixed incomes have a problem meeting such exhorbitant increases.”
UUP MEP Jim Nicholson has said the loss of almost 400 jobs at farm fed chickens in Coleraine could have a devastating effect on the poultry industry in Northern Ireland, especially when this is a top company who have lost out to cheap world imports.