More than 400,000 Bord Gáis customers are facing higher gas bills after the Commission for Energy Regulation approved an 8.5% rise in residential gas prices for the company.

The price rise will come into effect in October and will add €70 onto the average annual household gas bill.

This time last year Bord Gáis, which controls 69% of the residential gas market, got approval for a 22% increase for residential gas prices.

It had applied to the commission for a 7.54% rise in its residential gas prices in the summer.

In a statement this afternoon, the commission said that since the summer the price of gas in euro terms has continued to rise.

It said the value of the euro, which has decreased against sterling over the last year, is a key driver on gas prices as Ireland purchases virtually all of its gas prices from Britain.

In addition, it said that transmission and distribution tariffs for the forthcoming year have also risen.

The regulator added that the increase may cause problems for many consumers given the economic circumstances, but said that wholesale gas costs are something Ireland has no control over.

Citing the same increases in costs, Airtricity has said its gas prices will also increase in the near future.

Both Electric Ireland and Flogas have said they are reviewing their prices.

Age Action has described the price increase as "a huge blow to many older people".

It said: "The continuing problem of energy poverty must be taken seriously by the government who must guarantee that no further cuts to either the Household Benefits Package or the Fuel Allowance will be considered."