The price of electricity in the Isle of Man is to soar.

Manx Utilities today announced a two-stage increase of prices.

The standard domestic rate tariff will increase from 22 to 28 pence per unit on April 1 with a further rise on July 1, taking prices to 34 pence per unit.

That means the cost of electricity will be 54.5% higher on July 1 than it is now.

However, the Manx Utilities Authority says the price of electricity in the Isle of Man will still be lower than in the United Kingdom.

Wholesale natural gas prices drive electricity prices in Europe, the UK and the Isle of Man and these wholesale natural gas prices have increased by as much as 500% in the past 18 months.

Manx Utilities says it has shielded customers from this market volatility through a combination of forward purchasing of gas, which has reduced customer bills by £40 million, absorbing price rises by using reserves and cost control measures.

It is no longer sustainable for Manx Utilities to absorb price rises with a deficit of around £50 million anticipated for the current financial year.

Although the wholesale cost of gas has come down from its record high, in the medium-term prices are expected to remain around three times the level before the energy crisis began in 2021.

The chair of Manx Utilities, Tim Johnston MHK, said: 'We are very conscious of the impact that this will have on our customers and the decision to recommend an increase to electricity prices is not one the Manx Utilities board has made lightly.

'Specialist consultants were brought in to review the business and tariff structure to ensure any increase was appropriate. The aim has been to minimise the cost to our customers whilst ensuring Manx Utilities can continue to meet its financial obligations. Manx Utilities is not immune from the impacts of the global energy crisis.

'The board has been working hard to shield customers from the cost increases we have been facing over the last two years but we have reached a point where we cannot continue to do so.

'However, we will continue to review wholesale energy costs to ensure our tariffs remain as low as practicable.

'As always, I would encourage customers who are worried about electricity bills to please get in touch with Manx Utilities who are best placed to help with advice and support.'

A few weeks ago, Chief Minister Alfred Cannan warned that electricity prices would rise. Click here to read our story about that.

Customers who are concerned with their ability to pay for their electricity can contact Manx Utilities’ customer care team on [email protected] or by calling 687675 or using the Freephone telephone number 0808 1624 115.