Cheaper gas bills on the way

GAS bills are likely to come down over the coming years after the huge increases in 2004, British Gas owner Centrica believes. Centrica warns that prices could still spike higher temporarily, but it expects a drop as new import pipelines and terminals become available.

Centrica wants the Government to help speed up the liberalisation of European markets. This would help ensure that imports flow freely from the Continent, reducing the likelihood of a supply squeeze in the UK.

Energy companies including Centrica will be grilled this week by the Trade and Industry Select Committee about the rise in gas prices last year. Accusations of 'rigging' gas prices have led to an inquiry by regulator Ofgem - but this has unearthed little.

Centrica is expected to argue that the focus should be on Europe, which is dominated by a handful of large gas firms that are often partly State-owned. There is scant information about the gas kept in storage, which prevents markets working properly.

Britain will assume the European Union presidency in July for six months and Centrica will urge it to speed up reforms.

Household gas costs have gone up nearly 20% in a year, with electricity rising 15%, following the steep rise in oil prices. There is concern that thousands of people have been pushed into 'fuel poverty'.