New Year gift: Rising gas bills

New Year gift: Rising gas bills

	Published : Sun, 01 Jan 2006 20:05 By : David Simms Print this Story

LONDON - Gas price increases are but "inevitable," the managing director of the country's largest supplier British Gas has revealed. Mark Clare also said that the increase in wholesale prices was bound to have a knock-on effect for the consumers.

"With wholesale prices where they are, all suppliers are going to have to put prices up in 2006, and I think that is inevitable," he was quoted as saying on the BBC. "We are already having to pay very high prices for gas for January and February and consumers will therefore look forward to higher prices."

The gas prices for British Gas consumers have spiraled by 35 percent since the beginning of 2004 and parent company Centrica has said that further increases are likely in the New Year as well. "I don't think we have any choice when you look at the level of wholesale prices," Mr Clare pointed out. He added that with the onset of winter, British Gas "supply margins were adequate and we supplied customers without interruption".

However, these explanations did not hold any water with consumer group Energywatch, which maintains that companies are foisting unnecessary increases onto the consumers, "Some of the people who are suffering most are schools, local government, hospitals and libraries. They are in serious trouble because they can't get the extra money," said Allan Asher, the chief executive of the group.

He maintained that since ether was no problem with the supply, the real issue was more apparent than real. "The market isn't working effectively and it is costing the consumer and businesses billions," he alleged.

Analysts say that fuel bills are set to rise by at least 15 percent till March or April as gas suppliers pass on the costs to the consumers. Peter Lehmann, of Fuel Poverty Advisory Group felt that the prices were unreasonably high and "not a reflection of a market that is working sensibly."