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Household energy costs in Northern Ireland are expected to remain elevated through the autumn and winter if the crisis in Iran continues for another month or more, MPs have been advised. Since the outbreak of conflict on 28 February, wholesale energy prices have surged significantly. Disruptions in production and transportation due to missile and drone strikes across the Middle East have caused supply chains to slow or halt, particularly affecting heating oil prices, which have increased by about 80% in Northern Ireland.
David Blevings, representing the NI Oil Federation, informed the Northern Ireland affairs committee that even if the conflict were to end immediately, restoring normal supply levels would take time. “Even if the straits open tomorrow it’s going to take four to six weeks for the crude oil to reach refineries. That has to be refined and put into the system,” he explained. Blevings further stated that information received recently indicated that if a resolution occurs before the end of April, a return to near normal conditions could be seen by the start of October, marking the beginning of the fourth quarter.
Meanwhile, the Utility Regulator has issued warnings that reductions in gas prices, which came into effect this April, may be reversed should the crisis persist. Energy providers have not yet passed the increased wholesale costs onto consumers because many purchase their gas up to two years in advance, effectively hedging against price spikes. However, the longer the conflict continues, the less capacity these companies have to protect against further price rises. John French, Chief Executive of the Utility Regulator, noted a 19% increase in wholesale electricity prices on the all-island market since the crisis began, which also has not yet been reflected in household bills.
The MPs also heard criticism regarding the £100 oil heating grant recently announced by the Northern Ireland Executive. Pat Austin from National Energy Action described the amount as “woefully inadequate” compared to more generous support schemes in Scotland and Wales, where some households receive £300 and £200 respectively. Samantha Gallagher from the Rural Community Network highlighted a growing reliance on advice services, community support, and food banks. She explained that many people face hard choices, such as “putting fuel in their car to go to work or their lunch.” Gallagher remarked that the current oil support scheme has offered little relief for those she works with and expressed concerns over how long the scheme’s rollout will take
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