MANX Gas announced today (Friday) it is being forced to increase its tariffs from 8 October, 2010 in the face of global market pressures on energy prices. There will be a 5.5 per cent increase in all natural gas tariffs while the cost of Liquid Petroleum Gas (LPG) will rise by 7.6 per cent for all metered tariffs, mini bulk and cylinder tariffs. “It should be remembered that last year natural gas prices came down by 8.2 per cent in real terms and natural gas is still cheaper today than it was a year ago,” said Manx Gas managing director Tony Nicholls. “In the last two years the price of natural gas has come down by 23 per cent and is still very competitive as a fuel to heat your home. “Manx Gas is paying about 20 per cent more today per unit of gas than we were a year ago and against that we are only increasing our prices for natural gas by 5.5 per cent. The stark fact is that we can no longer continue to absorb rising costs and give shareholders the rate of return that is needed to maintain the infrastructure. “Wholesale energy market costs have started to rise in recent months and this trend is forecast to continue over the winter, even when taking into consideration forward purchase contracts secured by Manx Gas,” added Mr Nicholls, who only took over the reins at Manx Gas in August. “To take account of the forecast natural gas costs, and recover the price variance already encountered in the first two months of our financial year, a 5.5 per cent tariff increase is unfortunately necessary.” Mr Nicholls emphasised that the company had been careful in its forward planning which was a major factor in allowing the company to limit the increase in natural gas prices to 5.5 per cent. Explaining the reason for the increase in LPG tariffs, Mr Nicholls said there had been a steady increase in propane costs over the entire calendar year and these had not been fully recovered in the company’s financial year ending 30 June, 2010. This trend is forecast to continue over the forthcoming winter months. Standing charges for all metered customers will be increased by 3.5 per cent. “This is 0.9 per cent lower than the August Manx RPI of 4.4 per cent due to overhead efficiencies within the company,” he declared. Looking ahead Mr Nicholls added: “We will continue to review wholesale prices throughout the coming months to ensure all tariffs reflect prices on the energy markets, both downward and upward movements are possible as the market forecasts do not always prove accurate.” The OFT has been informed of the new tariffs.