Business braced for bumper energy bills

By Daniel Fineren

LONDON (Reuters) - Businesses are facing mammoth energy bills this year as record oil prices drive up gas and electricity costs across Europe, sparking anger among some consumers that competition is failing.

The price of oil has more than doubled since last year and wholesale power and gas prices have soared with it.

Big consumers -- from steel makers to paper manufacturers -- who buy their energy on annual contracts are facing huge cost increases as they negotiate with their suppliers at a time when economic growth is slowing.

"We are very concerned... All the renewals of people on annual contracts are starting to see 50 percent or more in increases coming through," Eddie Proffitt, gas group chairman at the Major Energy Users' Council said.

The MEUC, whose members include auto manufacturers, supermarkets and government offices, is concerned that there is very little difference in prices offered by suppliers in Britain.

"When any of our members go out to tender for the year... the actual variation in any of the quotes gets down to fractions of a percent," Proffitt said.

"Certainly there is no competition whatsoever... They are using the oil market as an excuse for driving up gas prices."

Many of the largest energy consumers have already seen their bills swell enormously because the price they pay tracks daily changes in the wholesale spot markets.