Gas bills in UK rising faster than elsewhere in western world

2009/feb

A new report from the Organization for Economic Co-operation (OECD) and Development, a club of the world’s 30 richest countries, shows that gas and electricity bills in the UK are 12.1 per cent higher than a year ago.

Energy inflation is less severe in all the other countries, except for Turkey, which is up 23.5 per cent.

Energy bills are actually lower than a year ago in our closest neighbours, with Ireland (-3.3 per cent), France (- 6.5 per cent) and Germany (-0.8 per cent) all experiencing energy bill deflation.

In the United States the average energy bill has fallen by 21.3 per cent compared to a year ago and the average across the OECD area is a fall of 8.9 per cent.

The figures, from the OECD’s monthly report into inflation, will once again raise the question about continental energy companies “picking the pocket” of British consumers. Four of the six biggest gas and electricity firms in the UK are European-owned.

Though the rate of energy inflation in Britain has started to recede, only one company – British Gas, which is still UK-owned – has dropped bills for its customers in the last year. This cut, which averages a modest 10 per cent, comes into force later this month.

Energy experts point out that British consumers suffer more than their European neighbours because of both its reliance on the gas market and its lack of storage capacity. France, for instance, derives 37 per cent of its energy from its nuclear power stations, meaning it is less reliant on the volatile global gas price.

Britain also has invested far less in gas storage capacity, which means it is less easy for this country to buy gas when it is cheap and store it for the winter.

There is enough storage to supply the country with gas for just 13 days, compared with 99 days in Germany and 122 in France.

The Energy Retail Association insisted British consumers were getting a good deal.

Garry Felgate, chief executive of the Energy Retail Association, said: “The UK has the most competitive market for gas and electricity in the world. The latest OECD’s figures don’t show the actual level of prices, just the change over the last 12 months. Despite last year’s price rises, recent Government data shows that domestic gas prices are still the lowest in the main European Union area.”

According to the Department for Energy the average British domestic customer does pay less for their gas than other European countries. However, Britain pays 15 per cent more for its electricity that the average in Europe, paying 12.03p per kilowatt hour, compared with 7.36p in France. These figures are for July 2008 to December 2008.

The average gas bill in the UK has hit £834 – after increasing nearly 50 per cent during 2008.

Joint gas and electricity bills – dual fuel – climbed from £912 a year ago to £1,303.