September 24 2000 MONEY IRELAND

Crude oil price puts the heat on in Ireland

Margaret E Ward

HEATING bills are expected to rise by as much as 50% this winter in one third of Irish homes. People with oil-fired systems face significantly higher bills because of a rise in the cost of crude oil.

Although the republic has reduced its reliance on non-renewable fuel sources since the last major fuel crisis in the 1970s, a third of homes still use oil heating.

Tom Halpin of the Irish Energy Centre said: "Oil went up from 21p per kilowatt hour last April to 30p-plus now. There has been an almost 50% increase in the price per litre."

In addition to supply and demand problems, the euro's slide against the dollar has increased the real cost of oil, which is priced in dollars, to Irish consumers.

Dermott Jewell, chairman of the Consumers' Association of Ireland (CAI), said the organisation was concerned about the impact of such increases on the elderly and disadvantaged. The CAI is calling on Charlie McCreevy, the minister for finance, to increase allowances or introduce a rebate for some oil users.

Professor Owen Lewis of University College Dublin's Energy Research Group said that after oil, solid fuel used for central heating was the second most popular Irish energy source (24%) followed closely by gas (20%), solid fuel/non central heating (20%) and electricity (6%). Consumers who do not use oil are unlikely to see a rise in heating bills. In recent years the cost of other fuels has remained relatively stable.

The price of gas, for example, has not increased for seven years. Halpin said: "It currently costs between 2.3p and 2.7p for a unit of heat but even if no fuel is used customers are billed a #132 standing charge."

Angela Brown, spokeswoman for Bord Gais Eireann, said the company would not raise rates for domestic customers until 2003.

Electricity costs increased slightly in 1997 according to Halpin. Jill Johnston, a spokesman for the Electricity Supply Board, said Irish prices are the fourth cheapest in Europe and will remain low.

Electricity costs 8.94p per unit. "A single unit has enough energy to provide either 10 hours of light with a 100-watt bulb, a seven-minute shower, or 60 slices of toast," she said.

Although there is no indication that gas or electricity prices are about to rise, these fuels are distributed by commercial companies that can ask for an increase through their regulatory bodies, said Halpin.

CAI's Jewell believes that if oil prices remain high, many people will change to gas heating, which is a cheaper and more price-stable alternative.

Switching, however, can be expensive. Halpin estimates that changing a boiler could cost between #1,000 and #2,000. This does not include replacement radiators, new ranges or extensive refittings. Energy Awareness Week begins today and runs until September 30. For leaflets, or advice on specific queries call the hotline on 1850 376 666.

http://www.sunday-times.co.uk/news/pages/sti/2000/09/24/stimoimoi01001.html

-- Martin Thompson (mthom1927@aol.com), September 24, 2000