Further energy price increases:
Gas and electricity suppliers were under intense pressure to cut bills last night as energy costs plummeted by 25% in four months. Wholesale prices have tumbled after experts predicted a mild winter ahead. But it is feared that instead of reducing charges the Big Six firms are plotting to hammer householders with a further 20% rise between now and Easter. And it could take nine months for customers to see a reduction in bills as firms try to recover lost profits. Paul Allen, chief executive of consumer group Energyhelpline, warned yesterday that prices may go up. He said: "This is something the big suppliers are planning. "The best hope is they get cold feet when they realise what the reaction could be." Another 20% hike would add £200 to average gas and electricity bills taking the total to £1,200 a year. It would also spark a furious reaction from MPs, watchdogs and charities which want bills to fall as soon as possible. The amount we pay for gas and electricity has soared in the past three years. There have been 13 price increases this year, with npower raising charges for the third time since January two weeks ago. The firm said a sharp rise in wholesale costs, the price it pays to bring energy into the UK, leaves it with no choice. Bosses add they have protected customers from the worst of the huge rise in wholesale prices since 2003. Gas has surged 250% and electricity 180%. But Help the Aged's Mervyn Kohler said further rises "would be hard to understand". He said: "Suppliers have put bills up, pleading poverty because of spiralling wholesale prices. If prices are now falling, it's time to ask for some long overdue cuts." Energywatch said customers would be "stunned" if prices went up again. Spokesman Graham Kerr said: "It's difficult to see how companies could argue that prices need to rise with wholesale prices falling as they are. Customers find it hard enough to understand why bills are going up by as much as they have been." The winter wholesale gas price - that suppliers such as British Gas pay to buy up reserves - has fallen by a quarter. It follows forecasts of mild New Year temperatures and the completion of two new pipelines linking the UK to supplies on the Continent. But energy suppliers argue this has little bearing on their business as they buy supplies on fixed contracts up to six months in advance. And British Gas insists it is not making any money supplying its 12 million customers despite raising household charges three times in the past year. Scottish & Southern Energy is tipped to be the first firm to increase prices again. Earlier this summer, it vowed to keep them on hold for the rest of 2006 and is now one of the cheapest suppliers. But industry insiders expect SSE to announce an increase to take effect in January. A spokeswoman said: "We made a promise we would not raise prices until the start of 2007 at the earliest and we fully intend to keep our promise." Wholesale costs started soaring in 2003 following the Iraq war and a fall in North Sea output. Experts claim the UK is also suffering from a lack of competition across Europe, arguing big state-sponsored monopolies are holding on to lucrative gas supplies. 19.9.06