Millions still paying record gas bills despite plunge in wholesale prices

Gas bills remain sky high despite a halving of the wholesale price.

Suppliers paid an average of 29.97p per therm for the fuel over the past three months - less than half the 68.42p per therm price for the same period last year.

Yet the price paid by householders rose by a third over the same period.

The growing gulf between the price paid by the public and the wholesale cost is filling the coffers of the country's big six power companies.

Tory leader David Cameron called for an official inquiry into the situation yesterday while industry regulator Ofgem has warned it will take action unless the price cut is passed on to the public.

Wholesale gas prices have fallen sharply in recent months as supplies became available via pipelines from Norway and the Netherlands.

But energy retailers point out that they buy gas and electricity many months in advance and it will take time before the lower wholesale prices can be passed on.

The official consumer body, Energywatch, said prices have been falling sharply for a considerable time.

A spokesman added last night: "The time is right for prices to start coming down.

"We would hope, given the scale of the increases over the last few years, it would be a significant cut. It is hard to understand why retail prices are still so high when wholesale prices have fallen so much."

British Gas, which lost around one million customers last year because of its rising prices, has signalled it will make cuts in the spring. A typical household's gas and electricity bill from the company now runs to more than £1,000 a year.

Energywatch said that if the market was truly competitive then one of the major suppliers - British Gas, npower, Powergen, SSE, Scottish Power and EDF - or a new entrant into the market would now be offering much lower prices.

The spokesman added: "Energywatch believes

this is a true test of the market and how competitive it really is. If the market was competitive, we would expect someone to make a break for it to try to win new customers."

The Energy Retail Association, which represents the UK's major gas suppliers, said it was "surprised" by Mr Cameron's complaints.

A spokesman said: "We have contacted the Conservative Party this morning to arrange a meeting with them so we can explain the facts."

She added: "Britain has the most competitive energy retail market in the world. Customers have a choice of electricity and gas suppliers and they are exercising this choice every day - 150,000 people switch energy supplier every week."

An Office of Fair Trading spokesman said the watchdog had not yet received an approach from Mr Cameron about gas prices.

"We are obliged to look at any kind of complaint or request, so we would look to see whether it fell into our remit or not," he said.

Previously, Ofgem has rejected all calls for an inquiry on the lines suggested by the Tories.