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Gas prices set to ease with improvements in import supply

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IMPROVED IMPORT infrastructure could cut the wholesale gas price by 40% by 2010, gas and power research firm Wood Mackenzie claimed this week.

Wood Mackenzie senior analyst Graham Tyler said: 'This should be the last winter for the next few years that security of supply will be a major concern for the UK. Our conclusion is that while this winter will be tight, the supply/demand position has eased compared with last year by about 10%.

'It should be noted that some high price spikes are likely, particularly in response to cold weather and/or problems with key production, transport or storage assets. But, in the event of a normal winter, we see the potential for winter gas prices to ease by about 8% compared with last year.'

Tyler forecast that the wholesale price of gas could fall by about 40% by 2010/11. 'If this saving in wholesale prices was passed on to domestic users this would lead to an annual reduction in the gas bill for an average household of £140, and an overall saving of £2.8bn per annum to the retail sector.'

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