The news source reported that Centrica is considering this move to ease profitability woes in the retail energy business as wholesale gas prices have steadily increased in the past year. Falling North Sea gas supplies are also affecting gas prices.
The forward gas prices for delivery in the UK for January 2009 have reportedly reached GBP1.13 per therm in early July 2008, a GBP0.50 increase compared to the previous year. The price of gas has increased as it is linked to the global price of oil.
The Centrica group, including British Gas, is reportedly more exposed to wholesale price fluctuations as it does not have a substantial upstream base of its own, and is being pressured to raise prices to reflect the premium it is paying on the open market.
The Times quoted industry sources as saying that Centrica will raise its prices in August 2008, just before consumption picks up sharply. Instead of a staggered price increase till January 2009, the energy company is reportedly considering a single major hike.
