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On 1^st April Manx Gas will be introducing new gas tariffs.

These tariffs have been carefully reviewed by the Communications and Utilities Regulatory Authority (the Authority) which has ensured that Manx Gas is meeting its new legal obligations to charge a price for its gas that reflects the cost of supplying it.

This results in a new tariff that is around 58% higher than the one currently in place.

The new framework ensures Manx Gas can only recover its costs plus a fair return. This means that when the wholesale cost of gas is low, tariffs will be low. When wholesale gas prices are high, as is the case now, tariffs will be high.

The new tariffs that will come into effect on 1^st April are:

Chief Executive Officer of the Authority, Ivan Kiely commented:

“Whilst these tariffs are high, these high levels are being driven by the current extremely high wholesale gas prices. We have written into the legislation the need to review tariffs twice a year, in January and July, and when the global gas markets stabilise tariffs will come down in a timely manner.

Due to the way the billing cycles work, customers will likely not see the full impact of the increases for a number of weeks, I would also encourage househ…

On 15^th March 2022 Tynwald approved the new Gas (Tariff Fixing)(Parameters) Regulations 2022 (the Regulations). The Regulations come into force from 1^st April 2022.

The key changes that the Regulations introduce include capping the revenue that Manx Gas may earn from regulated activities and introducing a formal process for tariff reviews and adjustments.

These Regulations remove the price freeze that has kept tariffs at 9.7p per kWh for consumers.   Tariffs will increase from 1st April and the Authority is aware that consumers will want to know what happens next.

The Regulations allow the Authority to introduce what it has determined to be a fair permitted return to be generated by Manx Gas; namely a 5.45% weighted average cost of capital and a 2.1% retail margin; the return is to be used to reinvest in and maintain the gas network and also to finance business operations as well as give a reasonable return to shareholders and investors.  

The permitted return represents only a small percentage of the tariff that consumers pay, at the moment due to the high wholesale cost of gas, a large proportion of the tariff will represent the cost of the gas itself.  As the cost of gas consumed is a ‘pass-through’ cost, as markets re…