It is the biggest gas price rise in British history and probably the most badly timed. Only a day before the announcement by British Gas that household bills would rise by a third, the wholesale gas price fell off a cliff.

Last week a utility could buy gas on the spot market for next-day delivery at about 60p per therm. On Tuesday the price had fallen to 33p per therm. If British Gas was in the market on Tuesday evening, filling up its portfolio with short-term gas supplies, it did some very good business.

Of course, it is more likely to be bad timing than cynical opportunism. Spot gas prices are notoriously volatile and consumer price rises of this importance and magnitude are not decided over lunch. British Gas was doubtless as surprised as other gas traders by the scale of the market collapse on Tuesday.

The reasons for the sudden weakness are many, say market operators, who point to the start-up of several North Sea fields that were out of commission for maintenance, and the warm weather.

But these factors are known. What is more interesting are signals of weakening demand – the oil price has been falling steadily from its peak of $140 per barrel last month to current levels of $122. Is the company rushing to get its price increase in place to lock in profit before the gas price begins to slide? Across most of Europe, gas is sold under long-term contracts linked to oil products and coal. Britain alone has an effective spot market in gas, but because we are no longer self-efficient and must import gas by pipeline from Norway and Belgium, our gas price has become linked to the oil price.

Niall Trimble, a gas consultant with the Energy Contract Company, reckons that the gas market is fundamentally weak. “Until recently, the price has been buoyed up by sentiment and high oil prices,” he said.

The question is whether British Gas sees the evidence of weakening demand that is beginning to excite the spot gas traders. Unlike other utilities, British Gas is in a relatively privileged position, benefiting from some very old contracts over North Sea fields struck at low prices dating from the 1990s. Mr Trimble reckons that a third of the British Gas portfolio is made up of old supply contracts. It also has the benefit of Morecambe Bay, a major gasfield that is now in decline but still provides British Gas with a cushion.

“Almost no one else has got that [benefit],” Mr Trimble said. They should be much better off than the other [utilities].”

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