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British families face further price hikes after Norwegian pipe leak
Thursday 21 August, 2008
By becca.talbot@consumerchoices.co.uk
Consumers are today faced with further energy price increases, after the wholesale price for gas rose by 14% today, because of a leak detected in a Norwegian pipeline.
As a result, British homeowners, who have already seen gas bills rise by as much as 35% this summer, could end up paying even more over the coming winter months.
The 14% price increase of wholesale gas followed news that Norway’s StatoilHydro had found a leak in the pipeline from its Kvitebjoern platform in the Norwegian North Sea to its Kollsnes gas treatment facility outside Bergen. The company has now shut the pipeline; which is expected to re-open next spring after maintenance work.
The news has caused a major uproar within the gas markets as the price of winter gas surged by 14%, to a high of 104p per therm as a result. This is above the record highs seen in June this year and around double the price per therm this time last year.
The increase could devastate cash-strapped households, who are already struggling with sky-high food prices, and increased energy bills.
| “There’ll be no respite for consumers from higher energy bills.” |
Experts have warned that unless wholesale prices begin to fall, the UK’s major suppliers will be forced to put up their charges again.
A spokesman for consumer watchdog Energywatch said last night: “There’ll be no respite for consumers from higher energy bills.”
British Gas recently announced a 35% increase, and rival EDF have also upped their bills by as much as 22%.
“For the four suppliers who haven’t raised prices for the second time this year (npower, E.ON, Scottish & Southern and Scottish Power), it’s now a matter of how much they will increase bills and when,” continued the Energywatch spokesman.
There are already an estimated 4.5million people living in fuel poverty, but this figure is expected to rise by at least a million this winter.
The events in the Norwegian gas market are important to Britain, because the country remains such a significant source of gas to the UK, which now imports around 40% of its gas due to dwindling reserves.
In a press statement, StatoilHydro said that it was considering when the pipeline could be re-opened, but stressed that its gas customers were “not likely to be affected by the incident”.
Chris Eagle, Financial Director of EnergyChoices.co.uk said of the shock story: “It seems the bad news is never-ending for consumers at the moment. I expect energy customers that haven’t already seen their prices rise, will do within the next couple of weeks.”
He adds: “With these rises imminent, now is the time to start thinking about energy efficiency and conservation in the home, the death of cheap energy means we need to start saving in other areas to help reduce energy bills.”
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