Households could see rises of over 40% by the end of 2008, market experts have
warned.
With the average household energy bill already over £1,000 for the first
time, families as well as businesses could be facing steep price rises
throughout the remainder of the year, bringing the average household energy bill
to over £1,300.
The predictions have come after recent warnings from British Gas about rising
wholesale energy prices, that "remain stubbornly high", predicting winter gas
rates of 82p a therm, compared with 44p a therm the same time last year.
British Gas insists that it has not fully passed the rises on to consumers,
and that at least some of the price increases will be rolled out to customers.
This is most likely to be in the form of two price rises - one in late summer
2008 and one in early 2009.
All of the major suppliers raised their prices towards the end of the last
year or in early 2008, passing rises in wholesale costs on to consumers in the
form of price hikes of around 15-20%, but many feel the price hikes are
unjustifiably high in comparison with the wholesale price changes.
Wholesale prices have continued to rise however, with prices up an average of
20% since the start of the year, due to the depletion of the North Sea gas
reserves and the consequential increase in the UK's reliance on imported gas.
The increase in gas prices also
leads to an increase in electricity prices, as a significant amount of gas is
burned in gas-fired power plants to generate electricity.
Many are speculating that if British Gas, Britain's largest energy supplier,
are being forced to push prices up, then the smaller energy companies must also
be feeling the heat.
This news comes at a time when power companies have been receiving criticism
for announcing huge profits at a time when consumers are facing higher food,
fuel and interest rates. In February Centrica reported £1.9bn of annual
profits.
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