British Gas' parent company, Centrica has today released its Interim Management Statement, leaving in its wake little doubt that further price hikes are on the cards.
According to its statement, wholesale gas and power prices have increased by 100 per cent since last year, forcing Centrica to pass on the increases through British Gas.
British Gas is Britain's biggest supplier of gas and electricity and has 15.9 million customers who have already experienced large price hikes in January. However, according to Centrica the rise in fuel bills
was not enough, it said in its statement:
"Following our retail price increase in January the wholesale gas price continued to rise, which has caused profit margins in British Gas in the first half of the year to be squeezed to levels below our long run expectations."
Consequently, Centrica warned that fuel prices would have to rise again, stating: "While the current outlook for gas prices does create a challenging environment for energy suppliers, we will take the necessary action to deliver reasonable margins in the retail business.
According to uSwitch.com, "if households are 'lucky' they will see a 10 per cent or £105 price rise by late summer with a further 15 per cent or £173 hike in January 2009."
Tim Wolfenden, head of Home Services at uSwitch.com, said: "If Centrica is feeling such acute pressure over pricing then it's safe to say that others are feeling it too.
"Suppliers have been holding firm, but the cracks are beginning to show. It's pretty clear that something has to give and that household energy prices are going to be shooting up again this year."
Commenting on Centrica's Interim Management Statement, Paul Schofield, head of utilities at Moneysupermarket.com, said: "Today's statement from Centrica is bad news for Britain's bill payers. This is the clearest indication yet that they will have to withstand further price rises and soaring energy bills this year as wholesale prices continue to rise.
"Now is an excellent time for consumers to review the energy market and make sure they have the right provider and product for their area and consumption." Mr Schofield added.
"Given this scenario, fixed rate energy plans are starting to look like a potential lifeline for worried consumers. Take up is traditionally low, however, their biggest strength is the security they offer at a time of rising prices, especially for those struggling with household bills or on a tight budget – for this reason a lot of people will be warming to them this year." uSwitch.com's Mr Wolfenden predicted.
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