A better deal for consumers - that's how a new voluntary agreement between the goverment and Manx Gas is being described.

For the first time, the island's gas supply market will be formally regulated. It follows years of monitoring gas prices where Manx Gas agreed to stay within a certain range of profitability.

Chairman of the Office of Fair Trading, David Quirk MHK said: 'Since then, Manx Gas has adopted the mid-point of that acceptable range and has been providing the OFT with confidential data, which has confirmed that the company has been complying with its voluntary policy.

'What we are announcing today is a formal voluntary system of regulation which contractually commits Manx Gas to a level of profitability which is below their previous target; and ultimately that means a better deal for consumers.

He said the new agreement would run for a minimum of four years and give estimated savings to customers of ?2million compared to the previous system. He said introducing statutory regulation would have been costly and 'probably confrontational'.

Managing director of Manx Gas, Tony Nicholls said: 'We are pleased that a formal voluntary regulatory agreement is now in place. For the first time, stakeholders will have a clear framework within which performance will be measured. The terms of the agreement are challenging but fair and will enable us to plan for future investment in the network.'

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