Bord Gáis has announced it intends to raise the price of gas to residential and small commercial and industrial users by almost 34 per cent from the beginning of October.
According to the company, this would mean the average residential customer will see their bill increase by €0.84 per day.
The increase was granted following a submission by Bord Gáis to the Commission for Energy Regulation (CER). Bord Gáis had applied for a 38 per cent increase.
In a statement released today, the company said that the rise in wholesale gas and oil prices over the last few years have seen similar price hikes in Europe.
However, the company added that gas prices in Ireland would still be well below the EU average.
The company also said that the cost to Bord Gáis of purchasing natural gas has risen by €150 million in the past year and was driven by by global market conditions.
The head of Bord Gáis Energy Supply, David Bunworth, said the increase was "hugely regrettable" yet unavoidable situation.
IBEC warned the increase in gas prices would have serious negative implications for the manufacturing industry in Ireland, while ISME said many small businesses would be put under serious strain by the increased costs.
IBEC said the proposed increase in the charges was due to Ireland's 90 per cent dependency on imported fuels. The body called on the Government to ensure increased competition in the electricity and gas supply market and called for excise duty relief on fuels.
The Labour Party spokesman on Communications, Marine & Natural Resources Tommy Broughan described the price rise as "shocking and unacceptable" w hile Fine Gael's Bernard Durkan said it was unjustified.
The Green Party's Eamon Ryan said the Government must introduce a radical new energy programme that will promote renewable energy and energy efficiency.
Two days ago, the ESB announced it was raising prices by up to 20 per cent.