Gas And Electricity Bills Could Increase By 50% In The Next Four Years
Analysts have cautioned that gas and electricity bills could increase by 50% over the next four years.
Deutsche Bank has said household energy bills could increase by £500 by 2015 because energy providers will pass on the cost of wholesale gas and electricity to consumers.
Utility Exchange reported last week that the governor of the Bank of England has warned that rising gas and electricity prices could push up inflation to 5% this year. But it’s not just householders that face higher energy bills – business energy bills are likely to increase too.
The UK is set to become more dependent on imported gas for several reasons over the next few years, one of those reasons being the new tax on North Sea oil and gas. Utility Exchange has reported recently that gas developers in the UK have said investment in the UK could be reduced as a result of this new tax. Centrica has warned that several of its gas fields may be shut down as it faces a tax bill of as much as 81% on some oil and gas fields.
Being dependent on imported gas means we are competing with other countries for gas and therefore the price is likely to go up. For example, Japan is likely to become more dependent on gas as it tries to recover from the recent earthquake which damaged nuclear power plants. The damage to its nuclear plants also means Japan is likely to want to move away from nuclear to another source of energy such as gas.
Not only will the UK become more reliant on imported gas in the future but higher fuel bills will also be needed to pay for new nuclear power stations along with improvements to the national grid and the installation of thousands of new wind turbines as the country tries to meet EU climate change targets.
It’s possible to predict price rises because energy companies buy their fuel months in advance. Consequently, the price they are currently paying for gas and electricity has not yet been reflected in the amount being charged to households and businesses. Only last week Centrica said that wholesale energy prices has increased by 25% but these prices had yet to be passed on to consumers.
Deutsche Bank has warned that dual fuel bills could rise by 30 -50% in the next four years, meaning households could face bills of £1,300 -£1,600 – an increase of between £170 and £470 on the average dual fuel bill at the moment.
Not only will these price rises affect household energy bills but they will also push up business electricity prices and gas prices too. It means that if your business energy contract is due for renewal it would be a good time to fix your energy bills. Prices are only likely to go up and so it’s a good idea to compare business electricity and gas prices and switch to the cheapest deal as soon as possible.