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Energy Bills Could Rise By Up To 40 Per Cent

Energy Bills Could Rise By Up To 40 Per Cent Britain’s energy giants have warned that large increases in household gas and electricity bills are likely this year, meaning that consumers need to be more careful than ever with their debt management.

Answering questions before the House of Commons business and enterprise select committee, the heads of the six biggest firms confirmed that a sharp rise was on the way.


Ian Marchant of Scottish and Southern Energy (SSE) told MPs that prices could increase by up to 40 per cent. This would hit low-income households hard, as well as people with high levels of personal debt.

Both Scottish Power and SSE explained to MPs they had to buy all their gas on the international markets, as they do not produce any gas or oil in their own businesses.

E.ON chief executive Dr Paul Golby added: "We are seeing a seismic shift in commodity prices. It's not difficult to see that the pressure is upwards.”

Chief executive of Centrica (parent company of British Gas) Sam Laidlaw added that it was "clear that gas prices are going to have to move up”.

“As we import more gas from continental Europe, we are having to pay higher prices,” Mr Laidlaw explained.


Domestic suppliers have blamed wholesale gas prices for the looming increases. Wholesale prices, which have risen by some 70 per cent this year, are closely linked to the price of oil, which has itself reached a record high of around $140 a barrel.

Energy watchdog Ofgem is holding an inquiry into the energy market. Last month it revealed plans to share information about low-income households with the gas and electricity companies.

The idea, which is set to go before MPs, is to enable the firms to make it easier to implement special tariffs for the poorest households - such as the elderly and unemployed - and other measures to ease fuel poverty.

Debt Management News posted on 10 July 2008

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