Guernsey Gas has been forced to increase its prices in two stages, one permanent and one temporary, due to a global gas shortage.
The cost of gas will rise by 2.2%. A secondary unknown price rise will then be implemented temporarily until the market evens out.
The Group CEO of Guernsey Gas’s parent company, Islands Energy Group, said it’s an unfortunate step, but an inevitable one.
“What has happened is that we are at break-even, we’ve gone from a profitable business to having 70% of our profits wiped out in the space of eight weeks,” said Jo Cox.
“It does mean I have had to make a really difficult decision to apply a price increase.”
Pictured: The price of wholesale gas has skyrocketed by 250% since the beginning of the year.
Ms Cox said several factors have led to the current ‘gas crisis’ becoming a global issue.
“We look at the previous year’s data and generally know when we need to buy energy in advance. We know it gets cold from October to March, we do something called hedging for that time to protect the price point.
“If anything happens outside of that, you do something called spot market purchasing.
“April and May in 2021 were weirdly cold, so the price started edging up because demand went up – combined with covid and people working from home, then Brexit and the increasing expense to drive lorries. All of this has crashed into a perfect storm - over an eight-week period gas doubled in price,” she said.
Because of a monumental leap in gas prices, multiple smaller gas companies in the UK have collapsed, as they simply didn’t have the capital to be able to buy at inflated prices.
Due to a lack of competition Guernsey Gas have been able to stay afloat, but the climate has decimated its reserves.
To avoid laying off staff, and for the firm to continue supplying gas to Guernsey, it has announced a price hike.
“When the market stabilizes again I will remove that secondary increase. I don’t want to do it long term because I do believe the market will stabilize,” said Ms Cox.
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