An Post to raise price of stamps by 5 cent
AN Post has a new year delivery that won't please many customers -- a 5-cent hike on the price of a stamp.
The postage company wanted to raise the standard price of a stamp by 10 cent to 65 cent but was limited to a 5 cent rise by the communications regulator.
As a result it will soon cost up to 60c to send a letter weighing up to 50g within Ireland.
ComReg rejected a request by An Post for a 10c increase.
An Post will now have to find another way of dealing with its deepening financial woes.
It believed it would make an extra €14m this year if it got the regulator's backing for the 10c stamp price hike.
The State-owned postal service already stands to make €8m from a hike in the cost of posting packages, which was approved last summer.
It argued that it had not put up the price of standard post since 2007.
But ComReg did not believe allowing the price hikes would address An Post's "cash burn" problems. It said the extra revenue of €22m it expected from the price hikes would only cover a third of its losses this year.
It expects An Post to lose €65m as it struggles to cover its costs as the only universal service provider in the State, following €50m losses last year.
The regulator has told An Post it must find an extra €43m savings on top of any increase in the price of delivering mail.
It fears it could run out of money in the next two years after its cash balance fell from €350m in 2008 to €150m at the end of 2011.
The regulator believes that price hikes would bring a bigger decline in the volume of mail this year than the 5pc per year fall predicted by An Post.
An Post complained that delays by ComReg in approving its application had made its financial situation worse.