Monday, 3 December 2007

Gas bills could rocket by 15%

Gas bills are expected to rise by 15% early next year, piling on the misery for families already crippled by soaring household costs.
The price rises, which could come as early as February, would add £85 to a typical family's gas bill, pushing it up to £653 a year.

Consumer groups accused suppliers of 'tacitly colluding' to talk up the price of wholesale gas to justify the 'unnecessary' increases.

Total energy bills for millions of consumers have already risen by 50% since 2004, with many paying more than £1,000 last year.

It meant around one in three local authority households - some 650,000 - struggled to meet fuel bills last year, paying an average of £814 a year compared with £590 in 2004.

Yet just six months ago many big energy firms reported bumper earnings, including record half-year profits for British Gas of £533m.

Last month, it emerged that food prices are also rising at their fastest rate for 14 years, after the price of basic ingredients such as wheat increased by 6%. This could add up to £1,000 to a family's annual grocery bill.

The average price of petrol also surged past £1 a litre last month - meaning the typical driver is £15.33 a month worse off than in 2006.

In March, British Gas slashed its prices after the price of wholesale gas fell by 50%. The reduction saw the average gas bill fall 17% to £568, while electricity bills also fell by 11% to £381. Since September, however, wholesale gas prices have risen by 38%.

This led Catalyst, a leading energy broker, to warn prices could go up by 10% in the new year. The Russian gas giant Gazprom, which supplies a quarter of Europe's gas, went even further, warning of a 20% rise.

But Allan Asher, chief executive of the consumer group Energywatch, claimed gas firms were exaggerating the possibility of supply problems over the winter to prepare the market for the price rises.
Gwyneth Rees, Daily Mail

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