New warning over soaring gas prices

7:48pm Friday 18th July 2008

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Gas prices are set to soar and then remain high for the foreseeable future, a report has revealed.

The independent report commissioned by Centrica, which owns British Gas, warns that prices could increase by 70%.

Jake Ulrich, managing director of Centrica Energy, admitted that gas price rises were likely to lead to a "potentially significant" rise in the number of people in fuel poverty. He also predicted that people would have to change their habits to deal with higher prices.

He told Channel 4 News: "I do think we will see people change their behaviour. I think people will use less energy and I hate to go back to the Jimmy Carter days in the US but maybe it's two jumpers instead of one."

He added: "I think people will change the temperature they keep the house, they'll be more cognisant of energy waste, they'll buy better appliances."

Gas prices will continue to rise for some time, he said, adding: "We're part of a world economy and I don't think we can rely on UK production or cheap gas, cheap energy of any sort any more.

"I think it's a reality not only in the UK but in Western Europe and North America - energy is going to become relatively much more expensive in the future."

Gas and electricity watchdog energywatch called on the Government to act now to reduce the pressure on wholesale gas prices and force the industry to deliver affordable energy for Britain's poorest consumers.

Chief Executive Allan Asher said: "The Government is right to say that the link to oil is a cause of the problems but wrong to say there is nothing that can be done."

He went on: "Rampaging oil prices are a serious and global contagion. That does not mean we should just take to our beds and hope that the fever will pass. Government can and should act in those areas where it can have an effect. Action to cut to the price link between gas and oil, action to improve the working of the domestic market, action to help those who can least afford to keep warm."

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