UK Bills

Wifey's mum lives in the North East of the country, in Durham, very close to Newcastle.

Typically, the weather is not the kindest in the country and it is usually colder and wetter than the South East and so she has to use the heating a bit more during the bitingly cold winters they have to endure.

She is a pensioner and lives in a small, one-bed roomed bungalow, on her own, and is fairly thrifty with her energy sources. Her last two quarterly gas bills have been £250 and £230!

Some Q & As from the BBC on gas pricing:

Centrica has signalled that gas prices for customers could increase again in 2008, owing to increasing wholesale costs for UK suppliers.
The owner of British Gas said that it was expecting a "materially lower" profit for the first half of 2008 despite price rises earlier in the year.
It said it would take "action to deliver reasonable margins".
So what should consumers expect for their gas and electricity bills later in the year?

What is British Gas saying?

Centrica, the owner of British Gas, made a trading statement saying that profit for the first half of the year would be materially lower than the first half of 2007.
It blames the "stubbornly high" wholesale gas and power prices in the UK that it is buying for the future.
It warned that wholesale gas prices increased by 92% from a year ago to now, and wholesale electricity costs doubled.

Haven't we heard this before?

Yes, wholesale prices were largely blamed for a round of price rises by the big six energy companies earlier in 2008.
In early January, Npower put prices up for its domestic electricity customers by 12.7%, while its gas price rose by 17.2%.
That same month, EDF put up electricity tariffs by 7.9% and gas prices by 12.9%. British Gas increased gas and electricity prices by 15%.
In February Scottish Power increased gas bills by 15% and electricity bills by 14%, and a week later E.On put up gas bills by 15% and electricity tariffs by 9.7%.
Scottish and Southern Energy was the last to make the move with an average 14.2% increase in electricity bills, and a 15.8% lift in gas charges for domestic customers coming into force on 1 April.

So why have wholesale prices risen?

Wholesale prices had fallen from highs seen in early 2006 but they began to rise again in about February 2007.
A variety of factors have been at play. Most of our gas still comes from the North Sea, but production has been declining faster than was expected.
As a result, the UK has had to import more of its total gas supplies. Meanwhile, the wholesale price of gas - which is linked on the continent to the price of crude oil - has been driven higher by record oil costs.
Meanwhile, rising coal prices have made producing electricity at coal-powered plants more expensive.
And as European firms turn to the UK's more liberalised market for supplies as a cheaper alternative to that offered in mainland Europe, that has also driven up UK wholesale prices.

What will this mean for my bill?

Centrica have not said directly how much bills would increase by, or even that they will be putting up prices at all.
But reacting to the announcement, price comparison website Uswitch.com is predicting that if households are "lucky" they will see a 10%, or £105, price rise by late summer with a further 15%, or £173, hike in January 2009.
Mark Todd, director at energyhelpline.com, said: "Undoubtedly, the 15% to 20% rise we've already had will be repeated again in 2008, with more price hikes anticipated in the first quarter of 2009."
And rises would not only affect British Gas customers.
Allan Asher, the chief executive of industry watchdog Energywatch, said that if British Gas raises prices, other suppliers could follow suit.

Shouldn't all these price rises be investigated?

They already are.
Energy regulator Ofgem has been looking into electricity and gas markets for households and small businesses since February.
It said it had no evidence of anti-competitive behaviour but is responding to customer worries.
The probe was announced the same day that Centrica reported a 40% rise in operating profits in 2007 to £1.95bn.
It includes investigating the relationship between retail and wholesale energy prices, barriers to customers switching gas and electricity supplier, and the competitiveness of prices to different types of customers.
It could report to the Competition Commission if it finds anything is wrong with competition in the market.