UK: Energy prices to soar early next year

Millions of households face another rise in gas and electricity bills early next year in response to soaring wholesale energy costs.

Industry experts warn it is only a matter of time before some companies are forced to shut down their plants during the winter when prices reach their annual peak.

The Energy Intensive Users Group (EIUG), which represents large industrial consumers such as chemical, steel and gas producers, said UK gas prices in particular were much higher than in leading competitor countries. According to one recent report, they are almost 40 per cent higher than in the United States.

It has joined watchdog Energywatch in calling for further investigations into recent wholesale price movements.

Jeremy Nicholson, director of the EIUG, said: “In the absence of a comprehensive investigation it is difficult for industry to see why [ international] price differences should be so wide.”

Gas wholesale prices hit a record 43.5p a therm last week, while electricity prices struck a peak of ?35 per magawatt hour, a rise of 40 per cent since the start of the year. A combination of factors, including record oil prices, the depletion of North Sea gas reserves and a crackdown on carbon dioxide emissions, has been blamed.

Spiralling wholesale energy costs are expected to hit consumers in a new round of price increases next year. British Gas, which put up prices 5.4 per cent in January, announced last month that the cost of gas will go up a further 12.4 per cent and electricity 9.4 per cent.

Price comparison service uSwitch says families could see their power bills rise by as much as ?145 this year.