Energy firms keep fuel price hike ‘under scrutiny’

Energy firms in the Channel Islands say they are keeping the price of fuel under “constant scrutiny” after it rose amid the Middle East conflict.

Iran warned vessels not to use the Strait of Hormuz, a crucial waterway through which 20% of the world’s oil and gas is transported after the US and Israel launched airstrikes on the country.

A spokesperson from Islands Energy Group said the spot commodity price for gas had been “very volatile and has risen significantly” since the start of the conflict.

The company is keeping the situation under review and said it will “reluctantly” have to look at its pricing structure if “the recent dramatic rise in gas prices is maintained for any length of time”.

The price of gas in the UK soared to its highest level for three years on Tuesday.

Guernsey Electricity said most of the island’s electricity supply is imported through a subsea cable to mainland Europe via the Channel Islands Electricity Grid.

A spokesperson said the company aimed to buy energy “at a favourable and stable” price using forward price hedging arrangements.

“This helps to mitigate against price volatility in wholesale energy markets and to ultimately smooth out the immediate impact on electricity tariffs locally.”

They said this “sheltered” Guernsey from the “huge increases” in UK electricity tariffs in 2022 after the Russian invasion of Ukraine.

In a statement on social media in response to questions about rising costs, ATF Fuels said: “The honest answer is – we don’t know yet.”

“We are managing the situation to support customers as best we can.”

It said its priority remained “transparency, fairness, and keeping our community supplied during this difficult time”.

Nick Crolla from Rubis Channel Islands said global fuel prices fluctuated daily as part of normal market conditions.

He said: “We actively manage this volatility to help provide pricing stability for our customers and maintain strong, reliable supply chains.”

He said there currently was “no supply concerns” but his team would continue to work to “minimise any impact on our customers”.

“While some price movement is expected in line with global trends, current prices remain among the lower levels seen over the past four years.”

Follow BBC Guernsey on X and Facebook. Follow BBC Jersey on X and Facebook. Send your story ideas to channel.islands@bbc.co.uk.