by Maya Robert:
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Centrica warns of possible rise to household energy prices
The UK could be facing future rises in gas and electricity prices, according to a statement by British Gas owner Centrica.
The energy giant warned that increased taxes combined with the rising costs of wholesale gas will have a negative impact on household energy prices in the UK.
March's budget revealed an increase on supplementary taxes in gas production from 20% to 32%.
Centrica has claimed that this equates to around £300 million in extra tax charges, placing substantial pressure on future profit margins and investments.
It also warned of the impact of the rising cost of wholesale gas, which it claimed had yet to be passed on to customers.
“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 announced.
The result meant that predicted levels of UK investment were no longer sustainable and would have to be cut.
"With the resultant reduced cash flow and increased fiscal uncertainty, we no longer expect to maintain the previously projected high levels of investment in the UK."
The announcement will come as unwelcome news for the millions of customers still reeling from rises in the price of gas and electricity at the end of last year.
Last winter, British Gas, E.ON, EDF, npower, ScottishPower and EDF all announced increases to their gas and electricity prices.
The full-scale round of price rises added £560 million to energy bills in the UK and affected 24.6 million customers.
Ann Robinson, Director of Consumer Policy at uSwitch, said wholesale prices continue to form a threat to the cost of household gas: “This is the second of the big six suppliers to talk publicly of the impact higher wholesale prices are having on their business.
“Clearly they are preparing the ground for a second round of price increases and consumers should definitely see this as a warning shot across the bows.
“That said, I would urge suppliers to hold fire for as long as they can.
“The price of oil has now fallen and the pressure suppliers are feeling could yet ease – given this I would urge them to keep a steady finger on the trigger and to protect consumers for as long as possible.
“It would be a shame for households to feel the pain of another round of price hikes if it later turns out to have been unnecessary.”
