UK energy chiefs to get grilling over price hikes

The bosses of the UK’s six biggest energy firms face a grilling from MPs today as they seek to defend the price hikes imposed on millions of households across the country.

Politicians on the Business and Enterprise Select Committee will probe chief executives from British Gas, EDF, npower, E.ON, Scottish Power, and Scottish & Southern Energy amid growing public anger over prices.

The average dual fuel customer is now paying nearly 15% more – £1,048 – (€1,300) for gas and electricity after the latest round of increases earlier this year, according to consumer watchdog Energywatch.

This is nearly double five years ago – but there is growing speculation that bills could rise as much as 40% later this year as firms tackle rising costs, adding a potential £400 (€506) to straining household budgets.

British Gas parent Centrica gave a clear signal of the hikes to come in May when it said it would take the “necessary action” to deliver reasonable margins at its residential business.

The chiefs of the “big six” are set to face a hostile reception, but are likely to argue the doubling of wholesale gas prices for the coming winter give them little option.

In Europe, wholesale gas costs are linked to oil prices, which have surged to near $140 US (€90) a barrel. European firms can often buy cheaper gas in a more liberalised UK market to fulfil immediate needs and stockpile it.

In the past three months as oil reaches new highs, gas has been steadily flowing from the UK to Europe through the 143-mile Interconnector sub-sea pipeline between Bacton in Norfolk and Zeebrugge in Belgium.

Customers are also sharing the extra cost of the industry’s efforts to tackle climate change through cutting carbon emissions and sourcing more electricity from renewable sources.