Biofuels and Gas Price

Biofuels look set to become more contentious than ever following a leaked report by the World Bank. According to the Guardian, the report claims that world food prices have lately increased by 75%, and points to biofuel production as the primary cause. The figures are drastically out of line with the US government's estimation of a 3% global food price rise, although the forthcoming report on the impact of biofuels commissioned by the British government is expected to tally with the World Bank's data. Norway, meanwhile, has confirmed that it will not be reversing its biofuel plans in light of the news.

In utilities news, it has transpired that British Gas is considering a price hike of up to 15% in August. The Centrica-owned company is contemplating the move as a possible method to improve profitability. British Gas's profit margins are low due to high supply costs, with forward gas prices for delivery in January 2009 well over double the previous year's figures. Price fluctuations are a threat that the Centrica Group is particularly vulnerable to, as it is reliant on buying fuel from other providers. Gas prices are high partly due to their connection to global oil prices, and partly due to supply shortages in the North Sea.
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