Price of wholesale gas for December delivery has risen from 60p a therm to 72p amid Japan's nuclear power blackouts
Domestic gas bills next winter are set to soar if the price of wholesale energy continues its upward course due to the Japanese earthquake, industry insiders are warning.
The unwelcome increases would come on top of the surging cost of petrol and other goods bringing more pain for consumers and raising government fears about mounting inflation. The forward price of wholesale gas for December has risen from 60p a therm to 72p on the back of the Far East nuclear power blackouts which have forced large-scale purchasing of extra liquefied natural gas.
Japan is the largest importer of LNG but demand there has rocketed as power companies seek alternative sources for stations knocked out by the shutdown of nuclear plants. IHS Global Insight predicted that Japan could need a further 9m tonnes of LNG a year.
The actual price of wholesale gas was 31p a therm in the winter of 2009 and about 51p in 2010 but has raced this month as some UK gas suppliers start buying for later in the year.
A source at one of the UK's leading power companies said: "You have to assume that this increase in the cost of wholesale gas will feed in to the price of domestic supplies ? certainly if this level of 72p continues for some time.
"The past (retail) price increases have taken no account for these latest, unexpected, rises."Domestic homeowners are currently paying about �1,050 already for dual fuel: gas and electricity and the price of power is rising because North Sea gas supplies are running down leaving Britain to import more. Norwegian pipelines have been pumping flat out leaving the UK to import LNG from places such as Qatar and Algeria.
Source: http://www.guardian.co.uk/business/2011/mar/20/gas-bills-energuy-japan-disaster
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