Gas bills set to hit £1,000 a year

18 July 2008 / by Rebecca Sargent
British Gas has released an eye opening report that reveals annual gas bills could soon hit £1,000, an increase of as much as 60 per cent.

The report, titled 'Under the influence of oil' has been carried out on behalf of British Gas's parent company Centrica, by Norwegian based energy advisors, Eclipse Energy Group and delivers a gloomy outlook for the UK's future fuel bills.

According to the report, the price of oil is to blame, it states that if the price of oil remains as high as it is at $140 a barrel, domestic gas bills could soon be pushing more Brits into fuel poverty as further increases in the price of oil will push the price of gas up accordingly.

The rising cost of oil is becoming a real issue here in the UK and worldwide, and the Treasury Committee has recently announced its intentions to take evidence on the regulation of oil markets, to which this report from Eclipse Energy will be submitted.

Within the report, Eclipse Energy also made some key recommendations, such as such as the need for regulatory stability within the market and how the liberalisation of European energy markets and greater traded market liquidity in Europe could help reduce energy bills in the UK.

Commenting on the report, managing partner at Eclipse, John King, 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."

However, speculation is already rife that the power industry has released this report in attempts to justify the intended price hikes of the coming months.

Fuel poverty is gradually becoming a real issue in the UK and now looks set to worsen, Director of Consumer Policy at uSwitch.com, Ann Robinson, said: "The worst has been confirmed. If the predicted level of price hike hits home, it will plunge an extra 2.4 million into fuel poverty, taking the total from 4.5 million to 6.9 million – a 53 per cent increase.

"Coupled with the credit crunch and the ongoing battle to make their money go further, consumers should steel themselves for a winter of discontent – the days of cheap energy aren't just over, they now seem to be extinct. I would urge consumers to fix their energy prices now before its too late," she warned.

Use our FREE service to compare the market and get gas and electricity quotes, including fixed rates to make sure you are getting the best available deal.

© Fair Investment Company Ltd