Businesses warned gas bills will keep climbing

Businesses are being urged to brace themselves for significant increases in gas and electricity bills over the coming years, after a new report for the UK's biggest domestic energy supplier Centrica warned household energy bills could rise by more than 60 per cent.

The study, undertaken by Norway-based energy analysts Eclipse, assessed the likely impact of soaring wholesale electricity and gas prices on energy bills and predicted the annual average domestic gas bill could rise from £600 to more than £1,000 during the next three to four years.

A spokesman for Centrica subsidiary British Gas told BusinessGreen.com that the study had not looked explicitly at how businesses energy bills would be affected, but he admitted that they were likely to see increases on a similar scale.

"The way business energy contracts and tariffs are put together is different to the domestic market, but if, as anticipated, we see wholesale prices keep going north, it will have an impact on business bills in a similar vein to the impact it will have on domestic prices."

He added that wholesale gas prices had risen by more than 60 per cent in the last six months and that with oil prices continuing to climb, the upwards trend was likely to continue. The Eclipse report also warned that the link between crude oil prices and wholesale gas prices in the UK was likely to get stronger in the future, because falling output from the North Sea makes the economy more dependent on imports.

Centrica managing director Jake Ulrich told the BBC that increasing gas prices would begin to force people to take energy saving more seriously.

"I do think we will see people change their behaviour," he said. "I think people will use less energy and I hate to go back to the Jimmy Carter days in the US, but maybe it is two jumpers instead of one."