Gas bills to soar over £1,000

Domestic gas prices could increase to over £1,000 a year in the coming years, pushing 2.4 million in fuel poverty.

With gas prices linked to oil prices, Centrica – owner of British Gas – warned average annual gas bills could increase from £600 to £1,000.

An independent report commissioned by Centrica finds: "Domestic users have to adjust to higher gas prices and prepare for a future where energy costs will account for a more significant proportion of household budgets."

Jake Ulrich, managing director of Centrica Energy, told Channel Four News: "I think it is going to hit people hard.

"II think people will use less energy and… maybe it is two jumpers instead of one.

"People will change the temperature they keep the house, they'll be more cognisant of energy waste, they'll buy better appliances."

The report by energy analysts Eclipse finds with oil at $140 a barrel gas prices will fluctuate between approximately 70 pence per therm (ppth) in summer and 110 ppth in winter.

"This is in stark contrast to recent years when prices have been in the 30 to 50ppth range," the report finds.

John King, managing partner of Eclipse, said: “This report signals the significant change which the UK will go through over the next few years as the price of the UK gas market becomes influenced by factors across the globe."

Ann Robinson, director of consumer policy at uSwitch.com, said: "The worst has been confirmed. If the predicted level of price hike hits home, it will plunge an extra 2.4 million into fuel poverty, taking the total from 4.5 million to an incredible 6.9 million.

"Coupled with the credit crunch and the ongoing battle to make their money go further, consumers should steel themselves for a winter of discontent – the days of cheap energy aren’t just over, they now seem to be extinct. I would urge consumers to fix their energy prices now before it's too late.”