ENERGY prices are likely to rise again. The cost of gas locally is under review and electricity tariffs face an uncertain future as oil prices continue to soar.

British Gas has announced increases in both its electricity and gas prices. Its managing director, Mark Clare, said yesterday that the era of cheap energy was over in the UK, prompting fears that the same would happen locally.

‘We’re not increasing anything at the moment, but it is under review and the price is being considered,’ said Guernsey Gas managing director Paul Garlick. ‘Prices went up on 1 July by 6% but, unfortunately, we’re having a long, hard look to see if we do it again.’

He said that the rise was not simply down to North Sea gas reserves running out.

Gas, electricity and oil prices are increasingly linked, going up and down together in reaction to situations like uncertainty in Iraq and increased demand worldwide.

‘We are looking at it, but it’s not just a gas situation. It is hitting oil. Petrol prices and electricity are all rising everywhere.’

Despite steady increases in energy prices, electricity customers in Guernsey have not seen an increase for 14 years, eroding the GE’s operating margin.

It made a net operating loss last year of £55,000.

After publication of the company’s annual report last month, GE confirmed that the contract for power via the cable link was up for renegotiation in November and costs would inevitably rise.

Guernsey Electricity could not, at that time, confirm whether this would be passed on to the customer.

The UK’s biggest energy supplier, British Gas, has announced rises of 12.9% for gas and 9.4% for electricity, the second price hike this year.

Analysts warned that other companies would follow.

These increases are expected to add an extra £52 a year to a typical quarterly-paid gas bill and £24 a year to an average household electricity bill.

Its managing director warned that more price increases were on the way. ‘The UK’s energy industry has never faced such high wholesale gas prices. Looking forward for 2005, the price is more than 50% up on 2003,’ he said.

‘Depletion of North Sea and Irish Sea gas reserves, the UK’s consequent need to import larger volumes of gas and higher oil prices are pushing up wholesale prices. The era of cheap UK energy is over.’

Oil prices have reached record levels already this year and some fear they could break the $50-a-barrel barrier.

n A typical three-bedroomed detached house in Guernsey using 12,000kWh of gas is currently paying about £714 a year.