Gas prices 'could rise 70%'

Consumer organisations attacked energy companies today for not doing enough to protect poorer people from the worst effects of spiralling gas prices .

The comments came after a report warned that gas prices could soar by up to 70% in the next two years and stay high. Annual gas bills could rise from around £600 a household to more than £1,000, according to the independent report commissioned by Centrica, which owns British Gas.

It said gas prices in the UK would be more strongly influenced by the soaring cost of oil, which has jumped above $140 a barrel this year - twice as high as a year ago. This is because declining output from the North Sea makes Britain more reliant on imports.

"The energy companies could do more to shield vulnerable people from the worst effects of rising energy prices," said Cassie Higgs, energy expert at the National Consumer Council. "An effective response would be for the companies to offer low-cost 'social' tariffs to vulnerable households, such as low-income families and elderly people. Some energy companies are doing well in this area, but others are offering schemes that are inadequate - often rationed and applied inconsistently."

Jake Ulrich, managing director of Centrica Energy, admitted that gas price rises were likely to lead to a "potentially significant" rise in the number of people in fuel poverty. He predicted that people would have to change their habits to deal with higher prices. "I do think we will see people change their behaviour," he said. "I think people will use less energy and I hate to go back to the Jimmy Carter days in the US but maybe it's two jumpers instead of one."

Energywatch, the gas and electricity watchdog, called on the government to act to reduce the pressure on wholesale gas prices and force the industry to deliver affordable energy for the less well-off.

"The government is right to say that the link to oil is a cause of the problems but wrong to say there is nothing that can be done," said chief executive Allan Asher. "The local impact is so catastrophic it should be leading the international drive to end the hugely damaging and entirely unjustifiable link between the prices of gas and oil.

Gordon Lishman, director general of Age Concern, said higher energy bills were hitting pensioners particularly hard. "Price rises on this scale would mean well over three million pensioner households - more than one in three - would be in fuel poverty," he said. "It is totally unacceptable that because of price hikes many older people may feel forced to cut back on their heating, which could put their health at risk."