It is the biggest gas price rise in British history and probably the most badly timed. Only a day before the announcement by British Gas that household bills would rise by a third, the wholesale gas price fell off a cliff.
Last week a utility could buy gas on the spot market for next-day delivery at about 60p per therm. On Tuesday the price had fallen to 33p per therm. If British Gas was in the market on Tuesday evening, filling up its portfolio with short-term gas supplies, it did some very good business.
Of course, it is more likely to be bad timing than cynical opportunism. Spot gas prices are notoriously volatile and consumer price rises of this importance and magnitude are not decided over lunch. British Gas was doubtless as surprised as other gas traders by the scale of the market collapse on Tuesday.
The reasons for the sudden weakness are many, say market operators, who point to the start-up of several North Sea fields that were out of commission for maintenance, and the warm weather.
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