Energy bills to hit £1,000 a year

18 July 2008

Energy bills are set to rise by 60% to more than £1,000 a year, British Gas has warned.

The energy giant says that the increasing cost of wholesale gas means that households should brace themselves for major increases in their utility bills over the next two years.

Centrica, which owns the supplier, admitted this means people will have to change the way they use gas and electricity – adding that wearing an extra jumper might replace turning up the thermostat.

Centrica managing director, Jake Ulrich, says: "I think it is going to hit people hard. 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 adds that people will also start to buy more energy-efficient appliances.

The firm made the warning in a new study – entitled ‘Under the Influence of Oil’ – with Norwegian-based energy advisers Eclipse.

Although oil prices have started to get a little cheaper – falling from a record $147 a barrel earlier this month to around $133 – they are still twice as expensive as a year ago.

Ann Robinson, director of consumer policy at, says that a 60% rise in bills will plunge an extra 2.4 million into fuel poverty.

"The worst has been confirmed,” she adds. “Coupled with the credit crunch and the ongoing battle to make their money go further, consumers should steel themselves for a winter of discontent - the days of cheap energy aren't just over, they now seem to be extinct.”

Robinson recommends consumers consider fixing their energy prices now.

Joe Malinowski, founder of energy price comparison website, agrees that consumers should get a fixed or capped deal – but he warns it is too late to avoid any sort of payment shock: “We are on the third phase of new capped and fixed deals, since the start of the year, and prices are up by about £200.

“However, these still look competitive compared to where we think prices will be in two months time. People have to pay the premiums – it’s not about finding the cheapest ever deal it’s about protecting yourself for the next 12 to 18 months.”

Moneywise TV: Beat rising energy prices.

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