Bord Gáis Energy has today announced an increase in electricity prices for its residential customers but also said it would cut its gas prices for households.

The energy provider said its electricity customers will see a 2.5% increase in their electricity unit rate and standing charge due to increases in the costs associated with the supply of electricity.

But it also announced a 4% decrease in the gas unit rate and standing charge for residential gas customers which will take effect from October 28. 

It said its electricity customers will see an average increase of €16.77 a year on a typical electricity bill, but customers' average gas bills will fall by €31.60 a year.

Bord Gáis Energy's dual fuel customers will see a decrease of €14.83 a year on a typical dual fuel bill.

"Factors beyond our control have led us to need to increase electricity prices, however we will continue to monitor costs closely and do all we can to ensure that our customers are receiving the best possible prices for their energy," Colin Bebbington, Retail Director at Bord Gáis Energy, said.

Daragh Cassidy from Bonkers.ie said the reduction in gas prices by Bord Gáis comes on the back of falling prices on wholesale markets so was not entirely unexpected. 

Mr Cassidy noted that Irish wholesale gas prices have decreased by around 55% compared to the same period last year.

He said that further small reductions can not be ruled out in the coming weeks, although pricing remains quite volatile. 

"However the upcoming budget is likely to increase the carbon tax, potentially wiping out a lot of these price decreases," he added.

But Mr Cassidy said the increase in electricity prices is "somewhat surprising" given that prices have not been increasing on wholesale markets in recent times.