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Page last updated at 08:52 GMT, Monday, 17 October 2011 09:52 UK

Are energy price rises inevitable?

As the government holds a summit with the six major energy providers, the managing director of British Gas has said that more price rises are inevitable.

Speaking to the Today programme, Phil Bentley said that volatility on the international energy markets meant price rises had had to be made, and the trend would continue unless a new source of cheap gas was discovered.

He said the profit margins of the energy companies over the year were reasonable, given the investment needed in energy infrastructure, and an "honest conversation" was needed on the future of energy.

But he accepted that the numerous tariffs for energy had led to confusion among energy users.

"The industry has to work harder to win over the confidence of our customers," he said.

Energy Secretary Chris Huhne, however, believed that, while the government was also forecasting an increase in world energy prices, UK price rises were not inevitable.

The issue in the short term was how to make the market more competitive, by helping people change tariff and insulate their homes.

The question for the long term was, he explained, how to get off the "fossil fuel price escalator" with energy sources including renewable and nuclear.

The energy companies, however, were "not the Salvation Army", and needed to "get a respectable rate of return".


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