A UK media report has suggested that significant price rises are on the horizon as the industrial contract renewal season approaches.

The BBC reports that energy brokers are telling major energy users that prices could be as much as 40% higher when the majority of contracts are renewed on October 1.

The gas supply was tight last winter, Jeremy Nicholson, director of the Energy Intensive Users Group, was quoted as saying by the BBC.

But forward prices for the last quarter of 2006 and first quarter of 2007 are higher than last year – indicating that there is a risk that supplies could be just as tight as last year.