Gas Prices Could Increase By 5%
NI Manufacturing have been notified by Energy Branch of the Department of Trade and Investment that their initial bid to secure a further exemption from the climate change levy on natural gas supplies in the Province until October 2013 has been turned down by the European Commission. This means that the Department will now have to go through a much more lengthy procedure which is likely to take 6-9 months, or even longer, and will not be in place when the current exemption runs out on 31st March 2011. If the application is eventually successful the rebate could be applied retrospectively to 1st April 2011.
The Department are presently trying to negotiate a reduced rate of 35% of the main CCL levy with Treasury and HM Revenue & Customs, under the UK’s General Block Exemption. This reduced rate would not be subject to European scrutiny, and could be applied from 1st April next year. Should the full rate of CCL be applied to natural gas supplies here, it would have a major impact on natural gas prices here with increases of 0.169p/kwh, meaning increases of 5% or more for users depending on contract or tariff price. There is a possibility however, that a rate, reduced by up to 65%, could be levied dependent upon the outcome of the ongoing discussions between DETI and the Treasury.
Operators of good quality CHP are exempt from the levy for fuel inputs to the prime mover while members of emission trading schemes operated via trade associations, normally energy intensive processes, are charged at rates reduced by up to 80%. NIM will be in regular communication with Energy Branch of DETI and the gas companies about this issue as it progresses and will keep members informed as the matter develops.