THE soaring cost of gas on the wholesale market will force British Gas to post an estimated loss of about £70m for the second half of 2005 when its parent company Centrica reports full-year results on Thursday.

The wholesale price has tripled since 2003, according to Centrica, which has long said that lack of competition across continental energy markets is hurting the British consumer.

Last week, the results of a European Commission inquiry slammed the European gas and electricity markets for having “distortions” and pledged to investigate any anti-trust breaches by Europe’s firms.

The estimated loss at British Gas, which contrasts with a profit of £25m in the same six-month period of 2004, is because the price of gas has kept rising, and Centrica had held back from exploring for its own gas, an analyst said. Centrica said it has spent £2 billion on upstream assets in the past few years.

Last Friday, British Gas, the biggest gas and electricity supplier to UK households, was forced to announce a 22% rise in gas and electricity prices from March 1. Earlier in the week EDF Energy raised prices by 14.7% for gas and 4.7% for electricity. The week before Scottish Power had revealed price rises. All three suppliers blamed wholesale prices.

The Department of Trade and Industry has been given figures that show industrial and commercial companies are having to pay 52% more for their electricity than a year ago, and 72% more for their gas.

The numbers come from an analysis by Energy Information Centre (EIC), a consultancy that procures energy on behalf of about 450 companies, including 40 members of the FTSE 100.

Because of the nature of the energy markets, where companies can face differing increases because of the timing and nature of their needs, the DTI has been keen to see the price increases faced by a representative sample of British businesses.

The price rises calculated by EIC, which is part of the Metal Bulletin publishing group, are based on contracts struck during the third quarter of 2005 — typically an important purchasing period for industrial power users.

Across all sites measured by EIC, the “delivered rate” for gas rose 72% to 69p a therm.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive