British Gas, the country's largest energy supplier, is preparing for a fresh round of energy price rises of at least 15 per cent, which could hit its 16 million customers within a matter of weeks.
Centrica, the owner of British Gas, is struggling to maintain profitability in its retail energy business as gas prices have trebled over the past year. Wholesale gas prices soared to a fresh record last week, adding to the pressure on Sam Laidlaw, the chief executive, to act swiftly to ensure the business is not forced into a loss this year.
UK forward gas prices for delivery in January 2009 touched a high of £1.13 per therm last week, up from 50p per therm a year ago. The price of gas is closely linked to crude oil, which rose to a new record of nearly $146.69 a barrel on Thursday.
Compounding the pressure on Britain's power companies, wholesale coal prices were also driven to record levels last week. The price of the benchmark contract for a tonne of coal for European delivery in the third quarter of this year hit $225 this week, up from less than $80 a year ago. Coal is still used to generate 30 to 35percent of UK electricity.
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