NI gas prices will rise 'if Iran conflict lasts another month'

Gas and electricity prices in Northern Ireland will rise if the war in the Middle East continues for another month or two, the Utility Regulator has warned.

Wholesale natural gas prices have more than doubled since the conflict began.

Those higher prices have not yet been passed through to consumers, as energy companies buy their gas up to two years in advance.

John French said: "It is how long this continues for which will be the real factor in determining where gas prices and electricity prices end up."

Speaking on BBC Radio Ulster's Evening Extra programme, French said his organisation was having regular conversations with energy companies, and they were currently feeling confident about how their buying or "hedging" strategies will minimise price rises.

But he added: "That confidence will start to wither if the conflict continues."

French regulates the prices charged by the dominant companies in the gas and electricity markets: electricity firm Power NI; SSE Gas in Belfast and the west; and Firmus in the Ten Towns network.

Price regulation decisions are normally made twice a year in October and April.

The regulator said the energy companies could ask for additional ad hoc price reviews if rising wholesale costs start to become unmanageable.

That happened during the early stages of Russia's invasion of Ukraine when prices spiked spectacularly.

French said at that time wholesale gas prices rose from about 60p a unit to as high as £9, with an average of £5 for a considerable time.

The moves during the current conflict have so far been less dramatic, with wholesale gas prices going from about 70p a unit to £1.70.

Gas customers are actually due to see their bills fall by 10% from April reflecting moderating gas prices before the conflict began.

By contrast, home heating oil customers have seen prices more than double over the last month.

Almost two-thirds of homes (62.5%) in Northern Ireland use oil for heating - the highest proportion of UK nations.

Heating oil is an unregulated market, which means customers are almost immediately exposed to short term price movements.