Comparison site uSwitch.com predicts that householders may end up paying ten per cent, or £91, more on energy bills in the New Year. It expects averages bill to rise from £912 to just over £1,000.
The prospective increases have been attributed to the decline in North Sea fields, an increase in wholesale prices and burgeoning oil prices. Furthermore, winter supply and demand will bring prices to the fore and as soon as one provider raises prices, other companies are expected to follow suit.
"This is going to squeeze household budgets dry. If the increase is across the board then households can expect to pay almost £100 more on their energy bills," said uSwitch.com consumer policy director, Ann Robinson.
Fuel poverty figures are expected to rise in line with increased gas and electricity prices. The Department of Trade and Industry has predicted that another 40,000 households are pushed into fuel poverty for every one per cent increase in energy bills. By Uswitch.com's estimations, 400,000 households are likely to face fuel poverty in early 2008.
Ms Robinson said: "The timing couldn't be worse. This winter is expected to be colder than last, plus consumers will be facing the full impact of the credit crunch in the New Year. This doesn't bode well."
A further report from the Confederation of British Industry predicts that UK households will end up paying at least £100 more a year for the next 20 years if the Government attempts to meet its climate change initiatives. It adds that while measures such as insulating homes could help to lower costs, many householders do not take action as they financial benefits are not immediate.
The CBI is appealing to the Government to take action in order to make the financial and ecological gains of doing this clearer and more affordable. CBI director general, Richard Lambert, said that the Government: "Must oversee a fundamental redesign that gives businesses and consumers the incentives to do the right thing - avoiding at all cost the temptation to rake in more revenue, which would be seen as a fundamental breach of trust."
Find out more about cheap gas and electricity suppliers
and green electricity suppliers
© Fair Investment Company Ltd