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British Gas parent company says prices will rise

Centrica also threatened the closure of UK gas fields following tax increases.

British Gas has announced that customers will face rising fuel bills as political turbulence in the Middle East and the Japanese earthquake continued to push global prices up.

The company also warned it would probably slash investment in the UK after the government raised taxes on North Sea oil and gas production. Centrica said increased taxation would eat into profit margins, sending shares tumbling by three per cent.

The government raised a supplementary tax charge on North Sea production from 20 to 32 per cent earlier in the year.

Centrica said the cost of heating homes would spike this winter, with the wholesale cost of gas likely to increase 25 per cent on last year's figures. The company reported that residential gas consumption was down 19 per cent for the first four months of 2011, with electricity consumption down four per cent from 2010 levels.

Forecasted growth levels for 2011 were being "moderated" on the back of the announcement according to a statement, while the company confirmed that UK investment would decrease, with the closure of one of its Morecambe Bay gas fields likely.