A MAJOR blow is on the cards for homeowners across the country as energy prices are set to soar in 2025.
Irish Government plans to hike back up the rate of VAT on gas and electricity from nine per cent to 13.5 per cent by the end of April.
As temperatures plummet to a freezing -3C, our energy bills are set to rise.
Head of communications at Bonkers.ie, Darragh Cassidy, explained that energy prices aren’t expected to fall in 2025.
He said: “The end of 2023 and early 2024 saw most of the country’s energy suppliers cut their prices twice.
“While SSE Airtricity and Electric Ireland reduced their prices for a third time in the second half of the year.
“It means gas and electricity prices in Ireland are now around 25 per cent to 30 per cent below their peak at the height of the energy crisis. But they still remain high.”
Mr Cassidy continued: “Wholesale gas prices are still over double, what would until recently, have been considered normal levels.
“This doesn’t look like [it’s] changing much over the coming year. And of course any further outbreak of war or conflict could see prices shoot even higher.
“Wholesale electricity prices also remain very high. They look like ending 2024 at over €100 per megawatt hour for the year.
“Only a bit below what they averaged for 2023 and still well above the €35 to €40 price that was considered normal before the war in Ukraine broke out.”
Wholesale prices only make up “around half of a household’s energy bills” in Ireland.
There’s also VAT, Government levies, grid fees and the suppliers’ operating costs to take into account.
Households could see further bill increases if government hike the VAT rate in April.
Mr Cassidy explained: “If implemented, this would add around €70 a year to the average electricity bill and €60 a year to the average annual gas bill.
“And of course the carbon tax goes up again next May. That will add another €20 or so to the average annual gas bill.
“The cost for maintaining the country’s gas and electricity grids also continues to rise.
“The challenge of trying to get to Net Zero and dealing with a rapidly growing population is also requiring big investment in our grids.”
The CRU hiked grid or ‘network’ fees that added the equivalent of €60 a year to the average annual gas bill and over €100 to the average annual electricity bill.
Mr Cassidy warned: “Suppliers can choose to absorb these increased fees as part of the cost of doing business or pass them on.
“But if these fees are increased again next year by a similar amount then it will limit suppliers’ ability to reduce prices even if wholesale prices do fall.
“So regardless of what happens to wholesale prices, there will be upward pressure on consumer’s energy bills regardless.”
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