ENERGY
SUPPLIERS' STATEMENT ON WHOLESALE ENERGY
PRICES
12th September 2006
Britain’s energy suppliers have faced
250% increases in wholesale gas prices and
180% increases in wholesale electricity
prices since 2003. The news that day-ahead
prices have fallen is welcome news and hopefully
this will be followed by more widespread
future decreases across the wholesale market.
However, energy suppliers buy a substantial
proportion of their wholesale supplies months
in advance and the reality is that gas prices
are still at a historically high level.
In fact, forward wholesale prices for 2007
(at an average of 58.6p) are still 8% higher
than for 2006 (at 54.3p). Even more starkly,
2006 prices are still 48% higher than 2005
prices (at 36.8p).
The reduction in wholesale prices seems
to be caused by the market responding to
four coincidental factors – the new
gas pipeline from Langeled is due to come
onstream, experts are predicting a mild
winter, the Atlantic hurricanes did not
hit oil platforms and there is a period
of relative stability in the Middle East.
In the same way, global events could drive
prices down further or push them higher.
“Britain’s energy retail
market is the most competitive in the world
and every supplier will want to be the first
to announce a decrease,” says
Duncan Sedgwick, chief executive of the
Energy Retail Association. “If
there is a sustained decrease in the wholesale
prices then customers will surely enjoy
lower energy bills.”
Notes for editors:
The Energy Retail Association established
in October 2003 is the only dedicated trade
association for Britain’s domestic
energy suppliers. All the main energy suppliers
operating in the domestic market in Great
Britain are members of the association.
The ERA was set up at the instigation of
the energy supply industry in order to identify
areas where the industry can work together
for the common good without competitive
advantage.
For further information please contact:
Niki Bowles, ERA Media and Communications
Manager on 0207 930 9181 or 07730 898 641
Russell Hamblin-Boone, ERA Head of Communications
and Policy on 0207 930 9177 or 07810 374
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