Fears over fresh rises in energy bills for long-suffering households grew yesterday after wholesale gas prices for next winter set a new record.
The price of gas for delivery during the first three months of next year reached 100.93p on the commodity markets, a rise of 5% compared with Friday’s close.
This is more than double the cost of a year ago — and the first time a forward contract has breached the £1-a-therm mark in the summer, when, historically, supplies are cheaper.
The rise has come as the price of oil — which is linked to wholesale gas — surged to a new record above $139 a barrel on Friday. Oil has since eased back slightly, but is widely feared to rise further.
There has also been a steady demand for UK gas supplies from the continent.
Energy consultant Nigel Cornwall said with no price relaxation on the horizon it was a question of “when and not if” the UK’s major suppliers would put up their prices.
He is expecting to see domestic bills rise by at least 20% before the end of the year, and predicted a game of “call my bluff” among the major suppliers to see who moved first.
“The wholesale price rise has been driven by strong demand from the continent, and by the escalating oil price,” Mr Cornwall said.
“Our view is that the full effect of the oil prices has yet to filter through to the wholesale gas market.
“If there is no relaxation in wholesale gas prices, there will be a game of ‘call my bluff’ among the major gas and electricity suppliers to see who puts up their prices first.”
Pipeline flow data from the UK shows that Britain has been exporting gas during the past month.
European firms have been buying supplies from the UK to top up their own supplies.
In a further sign of wholesale gas price pressure, other contracts used by energy firms to secure summer supplies are also running at around double their cost compared with a year ago.
Last month British Gas owner Centrica warned it would need to take “reasonable action” to help protect its profit margins thanks to the near doubling of wholesale energy prices.
Britain’s “big six” gas and electricity suppliers raised prices by up to 20% at the start of this year, blaming the soaring cost of supplies.
Speaking of the imminent price rises, SNP business spokesman Mike Weir last night said: “This is deeply depressing news for hard-pressed consumers, who are already struggling to make ends meet.
“Not only is Scotland missing out on our oil windfall but, because the price of wholesale gas is linked to oil, Scottish consumers are being hammered twice.”