Robin Pagnamenta, Energy and Environment Editor
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Energy companies are set to impose another round of punishing price increases on consumers, despite a steep slide in the wholesale price of gas.
Scottish Power is among those expected to announce double-digit price rises for its 5.2 million gas and electricity customers in the coming days.
E.ON, npower and Scottish & Southern Energy (SSE) are also thought to be preparing further rises to household bills.
The increases will be particularly galling for British families already battling with rising mortgage, food and fuel costs, because they follow a sharp fall in wholesale gas prices.
The price of gas for delivery the following day has dropped 32 per cent over the past month, from 69p per therm in early July to close at 47p last night.
Forward gas prices have also fallen. The price of gas for delivery this winter has declined from 104p per therm last month to about 88p per therm.
The decrease has accompanied a near-20per cent drop in the price of crude oil, to which most commercial gas contracts are linked. That touched a high of $147 per barrel on July 11 and is now at about $118.
Andrew Horstead, an analyst at Utilyx, the energy consultancy, said that a supply glut during a period of low summer demand had also forced prices lower. Last week spot gas prices fell to as little as 33p - the lowest for several months.
However Mr Horstead said that further price rises were probably “inevitable” for UK consumers.
“It's not a question of if but when the remaining four increase their prices,” he said.
Energy companies buy their gas using a variety of short and long-term contracts, so some are more exposed than others to fluctuations in wholesale markets. EDF was the first leading energy company to announce price rises for its five million UK customers, of 22 per cent for gas and 17per cent for electricity, two weeks ago.
It was followed last week by British Gas, which increased prices for gas customers in some regions by as much as 44 per cent.
It blamed soaring wholesale energy costs and the need to import more supplies because of the depletion of stores in the North Sea. British Gas also said that it needed to raise prices to ensure it could invest in new sources of low-carbon energy.
A spokesman for Scottish Power declined to comment on potential price rises, while npower said that the company was continuing to monitor the market.
Energy companies have come under fire in recent weeks after MPs on the Commons Business Select Committee issued a damning report on the UK energy market. Peter Luff, its chairman, cited “very real problems in the energy markets at all levels”.
The report accused the so-called Big Six suppliers of operating in a cosy world of minimal price competition. This created an environment where it was “easy for those players to make informed judgments about the behaviour of their competitors. This alone can distort competition without any actual collusion occurring”.
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commodity prices have fallen dramatically and pump prices have reflected this to some extent but no downward movement in gas prices : why?
peter, london, uk
Come on tough guy Gordon, withhold all EU payments until the European countries put pressure on their semi-state run energy companies to reduce UK prices!
John, Cheshire,
Gorden Brown recently begged the Middle East to invest in our nuclear power industry.It is incredible our government is willing to hand control of vital utilities over to foreign powers.
I believe Tehran is showing an interest in nuclear matters, perhaps the Primeminister should contact them.
LB, BRACKNELL, UK
This is another example why the bible says that 'Greed' is classified as a 'deadly' sin. Greed is killing this nation!
Mark, Maidstone, England
British Gas claim the need to raise prices so they can invest in low-carbon energy. Investment used to be what shareholders funded. Or are paying customes now to share in dividend pay-outs?
A Woods, Skipton,
Oil prices will eventually drop below $100 a barrel, but the price of petrol & diesel will stay above £1. Gas and electricity will stay high. Do you think the Oil, Utility companies and this government will 'kill the gilded calf'? No way! There is money to be made at the expense of the taxpayer!!
Louis, Liverpool, UK
As French reports indicate there is and was no shortage of oil, all these rises are unjustified and criminal. Here I have informed the Gas Co. to take away their meters. Better to use one energy than two. Also installed a wood burning stove. Now they can all go to hell with the banking cartel.
victor compton, Cherbourg, France
EDF is French Government controlled. The French Government has just capped rises to FRENCH people. Does that not ring bells? What is the EU for? Why do we pay so much to join a club where the facilities are denied to us?
Are we being sidelined?
Our leader is not English and not elected.
French??
Neil, Maidstone,
It is your 'duty' to switch supplier every year whether you need to or not. We are being taken for a ride by price-fixing utility companies who have zero competition. The only way to get back at these thieving *ankers is to cause as much administrative disruption as possible.
David Smith, Stourbridge, UK
Perhaps a few utilities executives in the dock alongside the BA price-fixers will turn their minds away from profit by blatant theft and towards their customers.
David Thijm, Stourbridge, UK
Time to publicly acknowledge the failure of current energy policies
Favouring industry over consumers has gone on too long
Civil unrest is not usually the British way however you can feel it coming
Enough is enough
Antony, London, UK
This government forces us to pay every tax it cares to invent; yet in the face of blatant and unnecessary increases by utilities suppliers, it is strangely unwilling to tax them, and help the needy.
Has this government forgotten it calls itself a (hard) labour government.
howard, london,
When a government grants monopoly powers to companies, then it has to actively manage those monopolies. It has to ensure that there is not even a possibility of price fixing - or cross subsidisation by British consumers to European consumers.
So how active are our regulators?
Stuart, Wessex,
If things carry on this way there will be civil unrest soon
It is no good the Government giving pensioners a bigger Winter Fuel Allowance because The Companies will see this as the green light to continue hiking prices.
We cannot keep paying out more money with less.
Stephen Holmes, Withington, UK
Why can't there be more transparency on pricing rather than having us all jump through hoops trying to guess who is offering the best deal at any point in time, then having to do it all again a few months later to avoid being ripped off?
Terence Hart, Bellshill, Scotland
Is this a cartel? Certainly looks like one.
MarkS, Leeds,