HOUSEHOLDS face two 20pc increases in their gas bills over the next six months, the Irish Independent can reveal. The 20pc increase announced yesterday will be followed by one potentially as large early in the new year.

The first rise will come into effect just a month after the recently announced 17.5pc hike in electricity bills and will compound the misery for consumers who are enduring spiralling petrol, grocery and mortgage prices.

The combined gas and electricity increases are expected to add as much as 0.5pc to the inflation rate next year -- with little hope of pay rises to combat the rising cost of living.

The Commission for Energy Regulation (CER) said yesterday that gas prices will go up by 20pc from September 1, with a second similar increase on the cards for January.

The regulator said that as a result of the 20pc increase, domestic gas bills will rise from a current annual average of €760 to €910.

The interim rise will be followed by another in the new year. A Bord Gais spokeswoman said that "in a worst-case scenario" it would be of a similar size. However, she pointed out that gas prices have come down from this month's peak and that the second increase could turn out to be less than 20pc.

The new increases mean the average annual ESB bill has increased by €375 in just two years, while yearly gas bills have gone up €212 since 2005. Added to this, petrol and diesel have increased by a third in just three years, while mortgage rates have also risen 2pc since 2005. Announcing the increase, the CER blamed a 108pc rise in wholesale gas prices which has occurred since October last year.

Bord Gais said it has experienced an unprecedented rise in prices in global energy markets where gas costs have increased by 80pc since the start of the year. The increase sparked a furious reaction from politicians as well as consumer and business groups.

The Society of St Vincent de Paul said it was "very concerned at another huge price increase which will impact hardest on the most vulnerable in our community". Labour said the gas and electricity price hikes were a double-whammy and highlighted the need for a fuel poverty strategy.

Energy spokesperson Liz McManus said 60,000 households live in persistent fuel poverty and a further 160,000 or so experience intermittent fuel poverty. "The most vulnerable in our society are most affected by fuel poverty," she said. Fine Gael's Leo Varadkar said: "The 20pc rise in gas prices from September and the additional rise planned for January 2009 is a double whammy for families already starting to feel the pressure of rising costs across the board."

But Social Welfare Minister Mary Hanafin said the Government was working to see how to tie together a strategy to support the most vulnerable. "I'm meeting the various utility companies to see what action can be taken to support people," she said.

The chief executive of business lobby group ISME described the increase as "another body blow to small businesses, many of whom are already on the canvas after recent electricity price increases."

(source:www.irishindependent.ie)