Iran war 'forces' 5% increase in gas prices

Gas customers in Jersey and Guernsey will see their bills go up five per cent, the Channel Island gas provider has said.

The Islands Energy Group - which operates as Island Energy in Jersey and Guernsey Energy in Guernsey - said it was a temporary increase due to disruption in global supply caused by the ongoing conflict in the Middle East.

However, the company said prices would only come down when wholesale energy costs returned towards pre-war levels and warned further price rises could be on the horizon.

Islands Energy Group chief executive Graeme Millar said: "We appreciate this is a rise above inflation, we didn't want to do it, we've been forced to."

Millar said the company would help customers as "best we can" and remove the rise "as soon as we can".

"We have been watching the ongoing conflict closely and, despite our hopes that prices would settle, the picture has remained concerning," he said.

"With much of the global oil and liquid natural gas market passing 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."

Iran has effectively blocked the Strait of Hormuz, a vital oil channel, since the US and Israel attacked the country on 28 February.

Millar added: "We want to reassure our customers that Island Energy is not making additional profit from this temporary adjustment.

"Our hedging strategy - where we buy future volumes at pre-agreed prices - has helped to limit the extent of this increase and shield customers from even greater instability.

"However, it is important to be clear and transparent. If wholesale prices remain elevated as our hedged contracts expire, further price increases will be necessary."

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