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Fuels: Prices

Volume 475: debated on Thursday 15 May 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform what assessment he has made of the effect of increases in fuel prices on the cost of domestic heating. (204228)

Rising fuel costs put pressure on suppliers to raise prices to consumers. The average wholesale price for gas to be delivered in the next four quarters has doubled since early May 2007.

About 85 per cent. of English households use gas as their main heating fuel. Internal BERR analysis estimates that the wholesale cost of gas currently makes up about 70 to 75 per cent. of an average household gas bill. Therefore a permanent rise of 20 per cent. (for instance) in wholesale gas costs could be expected to result in an average increase of about 15 per cent. in charges to the consumer.

Rises in global fossil fuel costs will also impact households using heating oil, or electric heating.

Actual charges to consumers will vary depending on the purchasing and pricing strategies of an individual supplier over time.