The boss of British Gas owner Centrica has warned that household bills could see a further increase in the autumn on top of the 54% hike set to take place in April.
Chief executive Chris O’Shea told Sky News that “nobody really knows” where the wholesale costs of energy – which are running about four times higher than a year ago – will go.
Mr O’Shea was speaking a day after regulator Ofgem announced an increase in the energy price cap which will see millions of households on variable tariffs pay on average £693 a year more.
Read more: What is the energy price cap and why will bills rise so sharply?
British Gas is the UK’s biggest energy supplier
The cap is designed to reflect the costs facing energy suppliers while protecting consumers from being ripped off with excessive bill hikes.
In October it will be adjusted again reflecting the latest wholesale gas price movements and analysts have pencilled in another rise.
Mr O’Shea told Sky’s Ian King Live: “Nobody really knows where they’re going to go.
“But… the forward market at the moment, which is the best indication, tells us that there may be a further increase.
“But ultimately Ofgem will monitor that. They look at it on a daily basis over a six-month period and then they set the price.”
The price cap for October is due to be set by Ofgem in August.
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Time to move away from ‘pile it high, sell it cheap’ market, says energy boss
British Gas, Britain’s biggest energy supplier, has around 7.5 million customers.
Mr O’Shea welcomed the £200 help for households announced by the chancellor to offset the coming price hike – a reduction in bills to be paid back over coming years.
He said it recognised the “stress and strain” facing consumers, who are also being battered by a wider upturn in inflation – which is at a three-decade high.
“We’ll just have to see where prices go over the next six months before we decide what we’ll do next,” Mr O’Shea added.
Greg Jackson, chief executive of rival energy supplier Octopus, told Sky’s Ian King Live: “No one wants to be charging customers hundreds of pounds more than they’re paying today.
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“But the inevitable is that thanks to colossal global gas prices, sooner or later households are going to be paying a lot more for their energy.”
He also welcomed the government’s intervention saying that spreading out the cost should ease the pressure on customers.
But Mr Jackson said there needed to be “total reform” of the energy supply sector after 29 suppliers went bust as a result of surging gas prices.
He called for a move away from the “pile it high, sell it cheap version of the Walthamstow market where companies pack up and go home when they’re out of stock” to one that looked more like supermarkets that “compete viciously to drive down operating costs” and pass on savings to customers.