Ofgem have warned that households could see their gas bills increase by £80 meaning they could soon be paying over £700 a year, reports The Daily Mail.
The reason for the increase is because wholesale gas prices have risen.
Experts in the energy industry have told consumers to shop around to ensure they have the best deal. However, they add that in addition to shopping around for the best deal householders should also try to cut back on their consumption.
Ofgem made the announcement in its quarterly update where it said “We forecast our estimate of wholesale energy costs to begin to increase over the coming months”.
Ofgem added “This is because prices in forward markets have further increased since our June report. This effect is more pronounced in the market for gas. We estimate that by spring 2011 gas purchase costs may increase by 13 per cent”.
If the rises in gas prices are passed on to customers it could see prices rise by 13% and bills increase from an average of £625 to £706 a year. Ofgem says some suppliers are already starting to increase bills and many of them have withdrawn their cheapest online deals.
First Utility has increased prices for its existing customers already as Ofgem said energy companies were making less profit from each customer than three months ago.
An energy expert at uSwitch, Thomas Lyon, said “At the moment, suppliers are still making a healthy margin. But Ofgem’s forecast suggests this may change by Spring 2011. This could herald a price increase for households although it’s important to stress that this is by no means a done deal”.
He suggested that consumers look around at move to competitive energy deals now as well as controlling their energy use during the winter months.
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Source: The Daily Mail