The head of the company that owns Britain’s biggest domestic energy supplier said yesterday that consumers faced further increases in gas and electricity bills.

Sam Laidlaw, the chief executive of Centrica, the owner of British Gas, said that soaring wholesale gas prices, which are linked to the price of oil, hurt margins and would inevitably lead to further price increases.

He declined to say how big the rises would be, but added: “We have a difficult period now. We’ve not made a decision yet but it’s clear at current prices . . . at some point in the future gas prices are going to have to move up.”

Heads of the six big energy groups, including Mr Laidlaw, were questioned by members of the Commons Business and Enterprise Select Committee as part of its investigation into competition in UK energy markets.

Mr Laidlaw told the MPs that Centrica was paying about £1 a therm for gas, but because of intense competition it sold it for only about 60p a therm to customers. “In a rising market, the margin gets squeezed,” Mr Laidlaw said.

This month leading market analysts told The Times that consumers could be hit by energy price rises of up to 40 per cent this year as power companies struggled to maintain profitability in the face of a trebling in wholesale gas prices.

At yesterday’s hearing Ian Marchant, of Scottish and Southern Energy, acknowledged that prices may rise by that amount. Rupert Steele, director of regulation for Scottish Power, said: “The whole industry figures will have to rise significantly.”

Centrica has come under particular fire for raising prices while simultaneously announcing bumper profits. It made £1.2 billion before tax in its most recent financial period. Mr Laidlaw said that accusations of “fat-cat earnings” were unfair.

Earlier, the committee heard evidence from smaller energy businesses that said that the big six operators sought to exclude them by not making the electricity they generated available on the open market. Instead, the six passed the power directly over to their supply arms, which sold the electricity on to customers.

Peter Bennell, of Welsh Power, told MPs: “Quite simply, we can’t buy what we need to deliver the power we need for our customers.”

However, the big operators’ chiefs denied the accusation and said that if they were forced to sell all their electricity in the open market it could lead to even higher prices.

Mr Laidlaw said: “It is not obvious that a process of releases and mandated sales would help here.”

Wholesale gas prices, which are linked to global oil prices, have increased nearly threefold in a year from 36.35p per therm in June last year to 94.50p yesterday. They briefly touched record highs of about 105p per therm this month. Crude oil prices have also touched a record of nearly $140 a barrel this week.

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