With the Office for Budget Responsibility predicting a 7 per cent rise in energy costs for families in winter this year, households could see their gas bills rise by more than £200 before next winter as Britain’s gas reserves run low, leaving the country dependent on costly foreign exports.
Because of the long spell of cold weather, demand has increased to the extent that, only recently, depletion of the UK’s gas storage fell to 93.71 per cent, according to data from Gas Infrastructure Europe.
The UK’s gas stores had less than three days’ supplies remaining after March’s temperatures resulted in householders turning up their heating. Britain’s gas supplies will not run out, the Government has insisted, so there is no fear of gas rationing or unsustainable price increases on the horizon, but energy firms have nevertheless expressed concerns about the gas system and what the future holds for gas prices in light of the current shortage.
Inenco energy market analyst Joe Conlan says that it is “conceivable that companies will raise their gas price by at least 10 percent”
“The UK is becoming increasingly reliant on imported gas, and the reality is that – every day this situation is allowed to continue – we risk the potential of rising bills without having the certainty that the energy will be there for us, says Andrew Horstead, risk analyst at Utilyx, the energy and carbon specialists.
A Department of Energy and Climate Change spokesman said: ‘It’s too soon to be sure what impact the current movements in wholesale gas prices will have on the prices we pay as consumers. While wholesale gas prices are one of the main factors impacting on bills, short term spikes may not have a significant impact.’
It’s too early to know if prices will compare favourably with the cost of home heating oil, but with an average price rise of 4% last year we are confident that prices can remain stable this year too.