Gas and Electricity Bills 'To Rise 15%'

British Gas is to hike bills by a further 15 per cent, the Times reports.

Sources close to the energy provider's parent company, Centrica, indicated to the newspaper that the firm was currently struggling to maintain a profitable position - and would therefore raise gas and electricity rates in order to placate shareholders. It is thought that this increase will be in place before the autumn, when temperatures drop and energy demand rises.

High wholesale energy prices led to all of the UK's "big six" providers administering double-digit price rises on their general plans in the New Year. These costs have continued to rise in 2008, meaning that the firms are coming under new pressure to put up the cost to consumers still further.

Forward prices for gas delivery hit £1.13 last week, up from 50p last year. Moreover, wholesale oil hit an all-time high of $146 for a barrel of crude on Thursday, while coal for European delivery reached $225 on the market today. By way of comparison, this price was just $80 one year ago.

Speaking to the newspaper, an energy industry source said: "[Centrica] are really feeling these prices... so it is just a question of how long they can hold on without being forced to issue a profit warning. Nobody wants to be put in that position."

Another source added: "By the time you get into September, the volumes of gas being used increases sharply which magnifies the losses, so the end of August would be the very latest [for the price rise]."