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British Gas chief warns bill rises are 'inescapable' as Iran war sparks energy supply panic

British Gas boss Chris O'Shea warns energy bill hikes are "inescapable" as the Iran war shuts the Strait of Hormuz, sending oil prices soaring to $106 a barrel

[A woman looking worried as she checks her energy bills]

Chris O'Shea, the boss of Centrica, said energy bill hikes will be hard to avoid(Image: Getty Images)

British Gas chiefs have warned that a fresh spike in energy bills is "inescapable" as the escalating conflict with Iran sends shockwaves through the global fuel market. Chris O'Shea, the boss of Centrica - which owns the energy giant - admitted that while the situation is still developing, the effective closure of the Strait of Hormuz is already choking off oil supplies.

Experts at Cornwall Insight have predicted that households across England, Scotland and Wales could see a staggering 332 hike in their average bills from July. It comes as a bitter blow to families who only just saw a 117 drop in April thanks to the energy price cap.

Quizzed on whether these eye-watering rises are now a certainty, Mr O'Shea told the BBC: "I think that's inescapable," provided current market pressures remain.

[Chris O'Shea]

Centrica boss Chris O'Shea was quizzed on price rises by the BBC(Image: PA Archive/PA Images)

Since the outbreak of the US-Israel war with Iran, the energy market has been in a tailspin. Crude oil prices have skyrocketed by 45 per cent, hitting a whopping $106 a barrel.

The crisis centres on the Strait of Hormuz - a vital artery that usually carries 20 per cent of the world's oil. With Iran targeting ships in the waterway, the flow of fuel has ground to a virtual standstill.

While the oil market is in meltdown, gas supplies have been less affected, though bills are still expected to climb. Mr O'Shea noted that only up to four per cent of global gas supply has been lost so far.

Speaking to Sunday with Laura Kuenssberg, he said: "The impact on gas, and therefore on electricity bills, should be lower than the impact on oil."

He warned that motorists are likely to feel the pinch first, adding: "My gut feel is that you'll see more of an impact of this in the petrol pumps than you will in bills."

The Prime Minister is set to hold a high-stakes emergency meeting on Monday with the Bank of England governor and top ministers.

The COBRA-style talks will focus on shielding Brits from the war's impact on the cost of living. However, the government appears to be clashing over how to handle the crisis.

Cost-of-living tzar and Iceland boss Lord Walker has suggested capping profits for energy firms and petrol stations.

However, Housing Secretary Steve Reed played down the idea, saying: "Were monitoring this, believe me, hour-by-hour."

Mr O'Shea has called for more North Sea oil and gas exploration to lower costs, but Energy Secretary Ed Miliband has already snubbed calls for new licences.

Addressing the need for a long-term fix, the Centrica boss said: "Nothing in and of itself will fix this but these activities will bring prices down. They won't isolate the UK - we're part of a global system - but they will bring prices down."

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