Hundreds of thousands of homes are facing even higher gas bills this winter as the price of the fuel increases on the wholesale markets

Bord Gáis issued the warning  in a routine monthly report on wholesale fuel prices on international markets.

The company said consumers can expect higher electricity costs because natural gas, a key raw material in producing electricity, is set to become more expensive.

Natural gas prices are based on oil prices from six months earlier.

 

The wholesale price of gas increased in May, although the wholesale price of oil, coal and electricity all fell which could augur well for prices next December or January.

Oil prices were over $100 a barrel in the first six months of the year, which could filter through to billing charges for electricity in October.

 

Analysts are concerned an escalation of violence and instability in the Middle East would send oil prices higher and undermine global economic growth.

"If Brent goes to $140, for sure you're going to have a double-dip recession in most advanced economies," said Nouriel Roubini, the New York University economics professor known for predicting the financial crisis. "Demand is growing fast and supply is not growing fast enough."

Forecasts on the price of oil in the near future are conflicting however. The price of a barrel fell to $98 a barrel on Monday, June 13 after Saudi Arabia indicated it would increase production.

 

Bord Gáis Energy Index reports says that the anticipated rise in natural gas prices in the final quarter of 2011 will also push up electricity prices. 

The monthly market report also finds that the wholesale price of oil, coal and electricity fell in May from a 31-month high because of a global sell-off in commodities associated with fears about the health of the US economy.