E.ON’s 22 per cent energy price hike this morning was widely expected and follows similar increases from British Gas and EDF.

Britain’s power companies are scrambling to restore profitability following a big rise in wholesale gas prices earlier this year.

The remaining three UK power companies - Scottish Power, SSE and N-Power - are expected to follow suit with further increases in the next few weeks.

The vulnerability of the UK gas market to price shocks was highlighted again yesterday after a leak on a pipeline in Norway triggered a 14 per cent rise in wholesale prices amid concerns that it could lead to reduced imports and a supply squeeze this winter.

Until the UK can reduce its reliance on imported gas and build far more storage capacity, UK consumers are likely to remain exposed to volatile pricing.

However, there is some good news.

Oil prices, to which most commercial gas prices are linked, have fallen sharply since early July so there may, at last, be an end in sight to the relentless series of price rises that have been imposed.

If the fall continues, there should be a gradual easing of the pressure on wholesale gas prices later this year.

However, consumers will probably have to wait until 2009 before any of the UK power companies consider passing this on in the form of a retail price cut.

Most groups are currently focused heavily on restoring their profit margins for 2008.

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