Gas boss: It's time to wear two jumpers

Householders were facing a new blow on gas bills today with a warning they could soar by two thirds within two years.

The rise was predicted by the managing director of Centrica, the parent company of British Gas, who warned: "I think it is going to hit people hard."

Jake Ulrich risked the anger of consumers by repeating the advice American president Jimmy Carter gave during the Seventies oil shock to wear a sweater to stay warm, but added: "But maybe it's two jumpers instead of one."

He spoke after an analysis prepared for his firm warned that because the gas price is linked to that of oil, the average could hit more than £1,000 a year by 2010, a 66 per cent rise. Combined with the increasing cost of electricity, the cost of the average household energy bill would be more than £1,600 each year.

Mr Ulrich said: "The pressure is going to be upwards on prices for some time."

Consultants Eclipse said the link between gas and oil prices was going to be reinforced because of the diminishing reserves of the fuel in the North Sea.

John King, managing partner of Eclipse, said: "With the UK increasingly reliant on imported gas by pipeline and liquefied natural gas, the international oil price will, in the near future, be the main price driver behind our energy supplies, with an impact likely across consumers, businesses and the economy generally.

"Domestic users have to adjust to higher gas prices and prepare for a future where energy costs (both gas and power) will account for a more significant portion of the household budget."

Energ y suppl iers passed on increases in wholesale costs when they raised retail power and gas prices by around 15 per cent in the first quarter of 2008.

Wholesale gas and power prices have kept rising, with oil up nearly 40 per cent since the start of the year.

Mr Ulrich said: "I think people will change the temperature they keep the house, they'll be more cognisant of energy waste, they'll buy better appliances."