Could gas bills be heading for 1,000 a year?

Some analysts have warned that the annual price of gas could even reach an average of £1,000, a 66 per cent rise.

Higher electricity bills are also expected within a matter of weeks, according to industry experts.

The warnings came after the price of gas to be supplied next winter rose to almost £1 a therm on wholesale markets yesterday.

Gas prices are set to reach an all time high this year - with an extra £400 on top of the average family bill

The cost of a gas contract for delivery in January 2009 reached 99.7p a therm on the commodity markets, around double the level a year ago and the highest level ever seen at this time of year.

The increase has been caused by the fact that gas traders link the price to oil, which has risen to around 126 U.S. dollars a barrel, a rise of 25 per cent since the start of the year.

This link has been condemned by UK consumer groups, saying it has provided a guarantee of huge profits to producers.

The consumer body Energywatch has argued that the annual cost of gas and electricity could be cut by £400 if the link to oil were broken.

Britain's 'big six' gas and electricity suppliers increased prices by more than 15 per cent at the start of this year, blaming the soaring cost of supplies.

Independent energy consultant Nigel Cornwall warned they may have to raise prices by another 20 per cent before the start of the winter if the gas prices remain at current levels.

That could send an average dual fuel bill for British Gas up to £1,266 for those not paying by direct debit, up from £912 at the start of the year.

Mr Cornwall said: 'What we are seeing now is a surge in the oil price which is being fed through to the gas price.

Prices collapsed back to 30p a therm in the middle of last year, but they have taken off now. We are talking price levels that are really quite horrendous.

'If wholesale prices are maintained at current levels, it is likely that suppliers would need to raise bills by 20 per cent.'

Other analysts have suggested a rise of 25 per cent on gas and 15-20 per cent on electricity could be imposed within a matter of weeks.

Mark Todd, director at energyhelpline.com, went further and suggested gas prices could go up 66 per cent.

'If this year's price rises weren't bad enough, gas prices are set to get much, much worse,' he said.

The Prime Minister and Alistair Darling meet oil bosses for a meeting where Brown admitted there was no easy answer to siralling energy prices

'Wholesale gas prices are double what they were this time last year for next January.

'We all know this will have a gigantic impact, and if these are passed to the consumer in their entirety, the UK could be facing a whopping 66 per cent rise in gas prices, taking a typical bill from £665 to £1091.

'And that's just your gas bill. Electricity bills are also expected to rise by a huge amount, as 40 per cent of our electricity is generated from gas.'

The scale of these increases is way in excess of most industry estimates.

Historically wholesale gas prices in the UK fall in the summer as demand wanes and Britain becomes a net exporter of the fuel from the North Sea.

Pipeline flow data from the UK shows that Britain has continued to export gas since the start of May despite the fact that prices are rising in this country.

Further price pressure has come from the weakening pound, competition for supplies from air conditioning-reliant countries such as Spain and Italy, and global competition for supplies of liquefied natural gas which come into the UK through shipments.