Centrica warns of energy price increases

Centrica, the owners of British Gas, have warned that energy prices will rise again next year, due to rising fuel prices.

In a statement, Centrica said that gas prices for the winter months had continued to be “volatile” and had remained high due to fears of a cold winter and gas shortages.

Centrica said that British Gas’s weighted average cost of electricity would be around 37% higher than 2004 and the weighted average cost of electricity will be 30% higher.

“Consumers will face another year of price increases as all suppliers look to recover higher wholesale costs,” the statement said.

However, the company said that it expects to lose only 160,000 energy accounts due to the price increases, compared to 764,000, when price increases were introduced in 2004.

British Gas customers saw their bills rise by 15% in September.

Centrica also announced that a second round of job cuts would take place, as part of plans to save an additional £30 million by 2007. It had announced in September that they wanted to reduce their cost base by £150 million, but has now increased that figure to £180 million.

Centrica stated that 2,000 jobs would be cut in July. Further specific details about the newest job cuts have not been released, but they are expected to take place throughout the group in the firm’s corporate and support operations.

Centrica said that 2006 would continue to be a “challenging year” due to continuing wholesale commodity price volatility.


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