New warning over soaring gas pricesIncrease could be as much as 70%

19 July 2008

A blue flame from a gas hob

Although there is no 'green gas', you can still switch your energy supplier to a green tariff

Gas prices are set to soar and then remain high for the foreseeable future, a report has revealed.

The independent report commissioned by Centrica, which owns British Gas, warns that prices could increase by 70%.

Jake Ulrich, managing director of Centrica Energy, admitted that gas price rises were likely to lead to a 'potentially significant' rise in the number of people in fuel poverty.

He also predicted that people would have to change their habits to deal with higher prices.

He told Channel 4 News: 'I do think we will see people change their behaviour. I think people will use less energy and I hate to go back to the Jimmy Carter days in the US but maybe it's two jumpers instead of one.'

Better appliances

He added: 'I think people will change the temperature they keep the house, they'll be more cognisant of energy waste, they'll buy better appliances.'

Gas prices will continue to rise for some time, he said.

Gas and electricity watchdog energywatch called on the Government to act now to reduce the pressure on wholesale gas prices and force the industry to deliver affordable energy for Britain's poorest consumers.

According to the report, commissioned by Centrica, an annual domestic gas bill could cost over £1,000 within the next few years.

John King, managing partner of Eclipse Energy Group, said: 'This report signals the significant change which the UK will go through over the next few years as the price of the UK gas market becomes influenced by factors across the globe such as oil, coal, LNG and CO2 prices.'

Retail prices

Energy Retail Association chief executive Duncan Sedgwick said: 'Undoubtedly there is pressure on prices at present, with the price of oil and wholesale gas rising so significantly. This has clearly led to a lot of speculation on how retail prices will be affected.

'Ultimately, Britain is no longer an energy island and we are much more exposed to the global energy markets than ever before.

'It looks like the era of cheap energy is over. However, if you are worried about paying your energy bills it is very important that you speak to your energy supplier without delay and find out what assistance may be available to you.'

Switch with Which?

Alison Morrison from Switch with Which? said: 'The suggestion that energy bills are going to rise so drastically is a cause for concern for many people, particularly when the words ‘credit crunch’ are becoming part and parcel of our everyday lives.

'However, we’d urge people not to panic as there are options available to consumers now that could help them with their future bills and save money. Very simple changes, like going onto a dual fuel bill for both gas and electricity, paying monthly and by direct debit, can save up to £233 a year. If you’re one of those people who didn’t switch your supplier after the first price hike, or have never done it before, now is the time to do so.'

Concerned customers can see how much money that can save by switching suppliers at www.switchwithwhich.co.uk or by calling the only freephone energy switching helpline on 0800 533 011.

The Press Association, All Rights Reserved.