Money News
British Gas owner, Centrica has given its strongest indication yet that further gas price misery is in the pipeline for consumers - the company reporting in a trading update that while the current outlook for gas prices creates a 'challenging environment' for energy suppliers, it will take the necessary action to 'deliver reasonable margins in the retail business'. In other words, the poor old customer is set to get stiffed.
On average, the month-ahead prices for gas and power are up 92% and 100% respectively above those for the same period of the previous year, according to Centrica. Against this backdrop all major energy suppliers increased residential energy tariffs during the first quarter of the year.
In January of this year, British Gas increased gas and electricity bills by an average of 15%. This in turn caused profit margins in the firm in H1 to be squeezed to levels below Centrica's 'long run expectations'.
Looking ahead, forward wholesale gas and power prices in the UK are likely to remain stubbornly high. The wholesale gas price for the second half of this year is double that experienced during the second half of 2007 and for the fourth quarter of this year it is over 80p per therm, compared to 44p for the same period last year.
If you think times are tough, they're set to get even tougher.
12 May 2008 © Moneyextra.com
Moneyextra.com recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.