British Gas warns of higher energy prices this winter

Centrica, owner of British Gas, is warning customers to expect higher energy bills this winter.

The company claims that the prices customers pay don’t reflect the cost of gas on the wholesale market.

Centrica has also announced that it will reduce investment in the UK because of the extra taxes the government has imposed on North Sea oil and gas production.

The interim management statement from Centrica said: “Worldwide energy markets have been turbulent in the wake of the natural disaster and subsequent nuclear issues in Japan and unrest in North Africa and the Middle East. In the UK, the forward wholesale prices of gas and power for delivery in winter 2011/12 are currently around 25% higher than prices last winter, with end-user prices yet to reflect this higher wholesale market price environment.”

The company says that average residential gas consumption for the year is 19 per cent lower for the first four months of this year and electricity use is down by four per cent.

The statement went on to say: “Market conditions for our residential energy supply business are significantly more challenging than in 2010.”

Centrica announced last week that it is considering shutting down one of its gas fields in Morecambe Bay as the tax rise makes it unprofitable to continue using it.

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