Business groups have reacted angrily to the latest rise in electricity and gas prices, writes Emmet Oliver.

The Commission for Energy Regulation (CER) yesterday approved a 9 per cent increase in ESB prices for October and said Bord Gáis's prices for businesses would rise by 16 per cent later this year.

The Small Firms Association (SFA) said it had been "led down the garden path with regard to electricity deregulation".

"We expected competition and greater choice, yet all we get is higher prices and no competition. The regulator appears to be taking a one-sided view. Even if we get competition in supply markets the current incumbent will still control the generation and transmission infrastructure and it would appear that they can press the button for price increases on demand,"said SFA director Mr Pat Delaney.

The small business organisation ISME said the rises represented a "black day for small business". It called the CER decision a "capitulation".

ISME said the CER should be dissolved because it had proved ineffective in regulating ESB and Bord Gáis.

ISME chief executive Mr Mark Fielding said: "The CER's announcement represents a black day for small businesses throughout the country, with the latest increases resulting in a significant hike in energy costs representing a 39 per cent increase for electricity in the last three years alone."

"This is a double whammy for many business users when the 16 per cent increase in gas is taken into account. This depressing scenario will lead to many companies having to review their cost structures with the inevitable consequences, including price hikes and job losses," he claimed.

The Chambers of Commerce of Ireland meanwhile challenged the energy regulator, Mr Reeves to explain why he had not applied a lower price increase to commercial and industrial general purpose users.

The group's chief executive Mr John Dunne said the evidence supporting this was already known to Mr Reeves.

"A recent consultation paper on the pricing of electricity by the CER suggests that business is currently being overcharged for electricity by up to 10 per cent relative to other sectors. And while we welcome the planned move to a marginal pricing mechanism which will rectify this inconsistency, this will not come into effect for at least 18 months. Why should business have to wait that long for relief. We believe that instead of the proposed 9 per cent increase across the board this represented an opportunity to begin to put this inequity to rights," he said.

He said also suggested the Government forgo excise duty on fuel in an attempt to limit the impact of the latest increase.