Calls grow for action as millions more face rising gas bills

Calls grow for action as millions more face rising gas bills

Pressure for an additional inquiry into wholesale gas prices mounted yesterday as millions more consumers faced soaring energy bills.

Npower, Britain's third largest energy supplier to the retail market, said its 6.3m customers would see gas bills rise by an average of 11.8% while electricity would be 7.6% more expensive from the beginning of next month, the second big increase this year.

The move follows the decision last month by British Gas, Britain's biggest retail energy supplier, to raise its prices by 12.4% and 9.4% respectively having already raised them in the spring.

Campaigning group energywatch demanded immediate action yesterday. "Consumers cannot afford to wait any longer for action. We are paying the price for a flawed market through our bills. Consumers should not have to accept this never-ending series of huge price rises without a satisfactory explanation," according to chief executive Allan Asher.

The call for action in the wake of the npower announcement was echoed by Liberal Democrat trade and industry spokesman Malcom Bruce. "An investigation may be needed to determine whether these price increases are merited, or whether energy companies are making unjustifiable links with oil and taking advantage of visible movements of the market." He warned the government may need to increase measures to tackle fuel poverty.

Regulator Ofgem urged consumers to shop around to keep bills down, suggesting npower customers could.....continued below

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save an average of £41 on electricity bills and £88 if they took both gas and electricity from the firm. "There are no prizes for loyalty in the energy market," it said.

Ofgem is already investigating the sharp rise in gas prices last October and has extended the inquiry to cover the coming winter's prices. "We are nearing the conclusion of our probe. If we have cause to, we will not hesitate to use the powers available to us to ensure the market works effectively," it said.

A spokesman for energywatch acknowledged the ongoing Ofgem investigation but argued the European commission should step in. "This is increasingly a European market issue. Ofgem does not have the powers to investigate offshore."

Npower blamed the rises on a near-40% rise in wholesale gas prices in the last year as UK supply declined. But retail chief executive David Threlfall said its new rates would be frozen until 2006.

· UK Coal expects coal prices to remain high into next year. It is continuing to invest but has difficulty gaining permission for opencast mining. Interim losses rose from £800,000 to £5.8m.

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