The wholesale price of gas in the island could be capped at 80p per therm if energy company Crogga’s new proposal is accepted.

Current pricing of gas on the wholesale market is £4.78 as of March 5 this year, so the change would represent a more than 80% discount on the current rates.

Crogga has said it ‘strongly believes’ there should be direct benefits to local consumers arising from any Isle of Man-sourced gas.

It has put a proposal forward to government that its licence conditions should include ‘a clause which guarantees affordable gas to Manx consumers during the life of its licence’.

Crogga has been lobbying the government to extend its licence, which currently ends on April 30.

Daphne Caine MHK, chair of the Climate Transformation Board, said: ‘I don’t think there’s a government on the planet that would not consider such an offer over gas prices in the current climate, but at this time it’s a matter for the Department of Infrastructure.

‘It would be a concern from a climate perspective. Gas accounts for 40% of our greenhouse gas emissions – it’s our biggest emissions area because we run gas turbines which convert gas to electricity, which we use to power homes and businesses.

‘Gas is also used in homes for heating and hot water and I appreciate why it would seem very appealing given the spike in energy costs but it’s hard to predict what a good price will be in the years ahead.

‘We are planning to transition away from gas from 2025, so potentially by the time any gas is extracted from our waters we’ll be well into our transition and we will need to be burning much less to reduce our greenhouse gases.

‘The current energy crisis gives us the opportunity to move away from our reliance on fossil fuels and move to cleaner technologies which will benefit both people and the planet.’

Prices of gas have been rising since May 2021 and Tynwald voted for a 27.5% increase in January 2022.

Member of the Legislative Council Rob Mercer said: ‘At a recent debate hosted by the Positive Action Group, the date given for the commercial production of gas was 2029.

‘No one can realistically predict the price of wholesale gas that far in the future, so this will have no short to medium term impact on Manx residents at all.’

Mr Mercer added: ‘The Isle of Man’s energy security does not rely on the promise of gas in six to eight years time.

‘We cannot ignore the fact that our businesses are calling for renewable power to meet their net zero objectives and the fact other available technologies are already providing cheaper energy and can provide some or all of the new energy resources we need within a much shorter timescale.’

Director of Crogga Mark Pearce said: ‘We see ourselves as the part of the solution to a greener future, not part of the problem.’