Chilling rise on way in fuel costs

WINTER gas surged to an amazing 80p per thermal unit on the UK wholesale market, threatening to push industry and household bills up further.

The rise brushed aside regulator Ofgem's market probe. In New York, crude oil soared to a new peak of $51.08 a barrel.

Banks and hedge funds are buying UK gas aggressively for delivery over the winter, while supplies are desperately tight.

The January price rose from 66p to 80p in a day, with some sellers asking 81.5p. Two years ago the price was 20p, a month ago it was 40p.

This is grim news for industry. Households can expect - at a minimum - fresh increases from suppliers that have raised prices by less than 10% so far this year.

It was not the best of days for Ofgem to narrow its market probe to Continental issues and peculiar contracts dating back to the mid-1980s.

Ofgem said the average winter gas price was 42.5p. But last night, the January to March average was 67.5p, said monitor The Herren Report.

Oil's rise was due to new hurricane fears. North Sea crude rose 96 cents to $47.15.