Why are gas prices rising?

Why are gas prices rising?

Why are gas prices rising?

There has been some controversy over the continuing rise of gas prices in the UK, particularly as the National Grid reports that Britain is well supplied with gas resources. However, operational problems and the fact that Britain receives the bulk of its natural gas from overseas mean that millions of gas consumers are having to foot the bill.

According to experts, there is often confusion between the gas situation in the UK and the USA - with the latter being abundant in gas resources, and the UK receiving half of its gas from Europe. Only around one third of Britain's gas originates in the domestic North Sea, while much is shipped in from the Middle East in liquid form, meaning Britain has less control over gas prices.

The wholesale cost of gas - the figure paid by gas companies for receiving gas supplies - accounts for around half of the amount charged to consumers, meaning the global situation has an unavoidable impact on the amount the regular citizen pays. Indeed, the wholesale cost doubled between 2003 and 2006 - a situation that was reflected in increasing gas prices which were out of the control of gas companies themselves.

While inflation means it's unlikely that gas prices will fall below pre-2003 figures, new developments such as the Interconnector pipeline constructed to deliver gas more easily from Belgium to the British Isles could mean that gas prices start to drop in the next few years, in addition to pipelines connecting Britain and Norway.

Even as the gas situation improves, the effects may take some time to trickle down to consumers - with gas companies typically obtaining their reserves months in advance. This means residents who are frustrated with the hike in gas prices charged by their supplier could stand a better chance of reducing their bills when switching to a different provider, particularly one that offers a fixed rate tariff for greater financial security.

If you're looking for cheap gas, comparing the tariffs offered by all the major suppliers can be considered an essential starting point for reducing your bills. Price comparison websites are not always the most reliable indicator in this instance, however, as they may not list special deals that are only available via the suppliers own website.

To find the lowest prices on specialised tariffs ideally suited to your needs, visiting the websites of respective gas companies can be the most effective option, where you could find additional discounts by signing up online or paying by direct debit.

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