Dan White: More gas, electricity price rises are inevitable. Here's how to get the best value
Rising interest rates, higher petrol prices, dearer food and more expensive petrol and diesel. Just when we thought that things couldn't get any worse they do. Soaring energy commodity prices mean that it is now inevitable that, at some stage over the next few weeks, retail gas and electricity prices will rise also.
Consumers have already been feeling the impact of higher crude oil prices with the average price of a litre of petrol having risen by 15pc and a litre of diesel by 16pc over the past year, according to the AA.
Now it is the turn of retail gas and electricity customers to feel the pain.
Not alone have crude oil prices been soaring, so have natural gas prices. Natural gas is now trading at 55p per therm on the London market, up 54pc over the past 12 months. This is bad news, not just for gas customers but also for electricity customers, as most electricity consumed in this country is generated using natural gas.
So how big could the price increases be? Last week Scottish Power, one of the biggest UK suppliers of electricity and natural gas, increased its electricity prices by 10pc and its natural gas prices by a massive 19pc.
If such increases were to be replicated in this country the average Irish electricity customer would find themselves paying an extra €100 per year while the average gas customer would be €135 per year worse off. These of course are only average figures, anyone with an old, energy-inefficient home could find themselves paying even more for their gas and electricity.
So what, if anything, can consumers do to protect themselves from these looming price increases? The first thing to do is to make sure that you are getting the best possible deal. Since the retail gas and electricity markets were liberalised it pays for consumers to shop around. If you do, you can save up to 20pc. With money tight we can't afford to ignore those sort of savings.
Consumers should also examine just how energy-efficient their homes are. In most cases they are likely to find that their homes are very energy-inefficient. While wasting energy in a badly insulated home may have been no big deal when energy prices were low it is a very different story now that energy prices are high and likely to remain so for the foreseeable future.
Anyone who now has an energy-inefficient home is burning money. That's something none of us can afford to do.
If you have a home that was built before 2006 you may qualify for grants towards improving heat insulation under the Better Energy Homes Scheme. Some of these grants are quite substantial with up to €4,000 available for external wall insulation and a €2,000 grant on offer for internal dry-lining.
The Better Energy Homes Scheme also provides grants to homeowners who wish to install solar panels. There are also grants available to low-income families under the Warmer Homes Scheme.
One word of warning: Even if you do qualify for a grant it will only cover a portion of the cost of improving the heat insulation in your home and you will have to cough up the balance. Before you do so you need to work out the likely savings.
If you can recoup the cost of improving the insulation in your home within a few years then it makes sense to do so.
However, even with the grants that are available, the payback period on some other energy-saving devices such as solar panels is much longer. As a rule of thumb, if the payback period is much longer than five years then don't bother.