Energy price increase expected

UK customers face more increases to their energy bills despite a 15 per cent rise this year, Centrica and Scottish and Southern Energy told MPs today.

UK customers face more increases to their energy bills despite a 15 per cent rise this year, Centrica and Scottish and Southern Energy told MPs today.

Centrica, which owns British Gas, has 16 million customers in the UK and is currently working with a 40 per cent loss on its gas sales, which its chief executive Sam Laidlaw said is not sustainable.

He said that the rise in the cost of wholesale gas will have to be passed on to customers.

The Times recently revealed fuel bills could rise by 40 per cent this year after wholesale gas prices almost tripled since June 2007.

Mr Laidlaw said the UK is suffering from a drop in the levels of its own gas production.

"The issue we face in the UK is that, as our gas production falls, we are no longer isolated from international markets and have to buy increasingly large volumes of gas from different parts of the world," he said.

"Globalgas prices are being driven ever higher by record oil prices and by rising demand from regions such as Asia."

Leading market analysts have said that the average UK energy bill could reach £1,467 within only seven months.