Cost of living crisis: British Gas owner Centrica warns high energy bills could last two years
Rising energy prices affecting millions of households in the cost of living crisis could last for up to two years, the boss of the UK's biggest energy supplier has warned.
Chris O'Shea, chief executive of British Gas owner Centrica, said “the market suggests” high gas prices will continue “for the next 18 months to two years”.
He said the high demand for gas was partly being driven by a move away from coal and oil.
“As we move towards net zero, gas is a big transition fuel,” Mr O’Shea told the BBC.
“And so as you turn off coal-fired power stations in other countries, there isn’t an abundance of gas that you can just turn on quickly.”
His comments come amid an energy crisis which has seen more than 26 energy suppliers go bust while wholesale prices climb steeply.
The rise in gas prices has been blamed on a number of factors, including high demand for liquefied natural gas from Asia and a reduction in supplies from Russia.
There are now fears that electricity bills could rise to unsustainable levels in 2022, with industry analysis estimating that annual household bills could reach £2,000 a year.
Boris Johnson is under mounting pressure to act on the rising household costs, ahead of further increases to capped bills in April.
The prime minister is said to be backing a plan being developed by Business Secretary Kwasi Kwarteng for state loans to firms threatened with closure over the winter.
Shadow chancellor Rachel Reeves has called for the government to urgently help consumers.
Labour said official figures showed that rising energy, food and other bills meant the Treasury is expected to have an extra £3.1 billion in VAT receipts in 2021/22.
The opposition party has proposed that the government uses those higher-than-expected receipts to remove VAT on domestic gas and electricity bills completely through the winter months to help ease the burden on household bills.
Health minister Ed Argar said the government has put in “a whole range of measures” including the Warm Home Discount, the Household Support fund and changes to the Universal Credit taper to help protect poorer families and pensioners from rising costs.