Islands Energy, the parent company of Guernsey Energy, said yesterday that it had been closely monitoring the impact of war in the Middle East on gas prices.
It said it could no longer resist an increase but denied that it would make any money from the move.
‘We have been watching the ongoing conflict closely and, despite our hopes that prices would settle, the picture has remained concerning,’ said CEO Graeme Millar.
‘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.
‘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.
‘We are watching the situation very closely and sincerely hope prices begin to ease, but the reality is that reductions can only be considered when wholesale rates fall back toward pre-conflict levels. Only when sustained and genuine cost decreases occur can we safely reduce tariffs without risking instability in the future.’
The company has written to business and domestic customers to inform them directly about the changes to their bills, which will come into effect on 7 April, and to advise them to contact Guernsey Energy’s customer team should they need help.
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