13/06/2011
Consumers face paying even more for their gas and electricity, the chairman of British Gas owner Centrica has warned.
Speaking to the Sunday Telegraph, Sir Roger Carr said he expected suppliers to follow in the footsteps of Scottish Power, which last week announced its gas and electric prices would be increasing by 19% and 10% respectively from the start of August.
The energy firm, which supplies 2.4 million homes, said this could see consumers paying some £173 a year extra for their fuel.
But Sir Roger warned increases across the industry were likely due to the wholesale cost of power rising by over 20% in recent weeks.
Sir Roger told the newspaper: "Moving wholesale prices have been very material, well over 20%, in recent months.
"In those circumstances, it is just a commercial fact that those things convert into price increases.
"It's high. Nobody likes higher prices but it's passing on costs which nobody can avoid."
Sir Roger, who is also president of the Confederation of British Industry, refused to comment on future prices at Centrica.
But Centrica, which has around 16 million energy accounts, last month said the price paid by households has yet to reflect fresh wholesale price hikes, hinting that further rises were on the way.
The Bank of England has also warned it expects household energy bills to rise by 15% this year, heaping more misery on cash-strapped consumers.
Spanish-owned Scottish Power, which also put its prices up in November, blamed its latest hike on wholesale price increases, rising transmission charges from the National Grid and the cost of complying with the Government's carbon legislation.
Sir Roger scotched rumours that commodity speculation is responsible for the increase in wholesale costs, blaming rising demand from emerging economies.
He added: "We're seeing huge demand for energy in those countries that are growing very rapidly and there doesn't appear to be any foreseeable change in that in the short-term."
Energy regulator Ofgem recently called for the industry to be overhauled after it found that the "big six" companies had put up prices more quickly than they reduced them when costs fell.
It called for them to sell off between 10% and 20% of their electricity output to allow smaller firms to enter the market.
Ofgem has also ordered energy companies to give its customers a minimum of 30 days' notice before putting bills up.
Emma Sword
