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Cheap gas deals end as wholesale prices rise 
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The best deals offered by most providers to new customers have already been withdrawn in recent weeks, and fears are now mounting that existing customers will face a price rise this coming winter. According to ICIS Heren, the leading energy analyst, prices for gas this winter – the price that the majority of gas companies will have to pay – have hit 58p a therm, up from 38p a therm in March. Ed Cox, gas analyst at the firm, said: "There is a lot of uncertainty in the market. And there is no real evidence prices will fall. Companies buy their gas six months ahead and if they see the winter prices continue to climb they are certainly not drop their prices to customers." The rise in wholesale prices has been driven by a variety of factors, most of them related to Britain becoming ever more reliant on imports. It now has to import over half of its gas, up from a quarter just a few years ago. One of the world's largest exporters of liquefied natural gas, Qatar, has started maintenance programme, which has meant major refineries are out of action, causing supply to drop and prices to rise. Norway, another major exporter, has also shut down refineries to undertake maintenance. Added to this, demand has increased around the world, thanks to the global economy gradually improving. Energyhelpline, an comparison website, has calculated that in recent weeks four of the cheapest deals on the market, available to new customers, have been withdrawn and replaced with more expensive tariffs. Scottish and southern Energy, for instance, replaced its Go Direct 4 deal with last week with Go Direct 5, with the new deal costing £984 a year on average, up from £898 on average – 9.6 per cent higher. Mark Todd, at Energyhelpline, said: "We expect this trend to continue. If you want a cheap deal, you better buy a fixed deal pretty quickly. "I'm not sure they will move up prices for existing customers for a while, as the finances of the gas companies are in pretty robust shape, but they could go up later in the winter."

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Tue Jun 22, 2010 8:05 am
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