British Gas owner Centrica has warned of potential further bill hikes for customers after revealing that continued high wholesale gas prices would hit results this year. The outlook looks bleak for consumers with householders facing the prospect of a 46% increase in household energy bills this year.
Why are they rising
Centrica say the high wholesale gas and power prices in the UK are driven by record oil prices, rising demand in Asia for the available Liquified Natural Gas and a lack of imports from Continental Europe. On average the month-ahead prices for gas and power were 92% and 100% respectively above those for the same period of the previous year." It says that these market factors have caused British Gas’ profit margins “to be squeezed to levels below our long run expectations."
To make matters worse, they warn that that these conditions look set to continue, saying that future gas and power prices remain “stubbornly high, especially as oil prices are predicted to hit $200 a barrel.
What this means for you
uSwitch.com warns that, if oil and wholesale pricing pressures mount, household energy bills could actually hit £1,327 before the end of 2008 – an unprecedented 46% increase in one year. This would beat the previous record set in 2006 when 15 price rises led to a 38% or £277 increase in household energy bills.
Even if the outlook was more optimistic, bills will be predicted rise from £912 at the start of the year to £1,153 by late summer and £1,327 by January 2009.
What you can do
One thing you ought to do is to
compare energy prices to see if you can pay less by changing your supplier.
Worried consumer may also want to
switch to fixed price energy plans. They maybe 2% more expensive on average than standard but they do offer security at a time of rising prices, especially for those struggling with household bills or on a tight budget – for this reason alone a lot of people will be warming to them this year.
Feeling ripped off by the rising energy prices? Tell us what you think
