Cold snap sends gas prices soaring to pounds 5 per therm

The pre-Christmas cold snap this week brought the winter's first warnings over fuel supplies, it has emerged, as the standby price of gas soared by more than 40 times on the wholesale market.

The surge came on Wednesday as domestic customers woke up to blizzard conditions and turned up their central heating. The price of gas on the so-called flexibility market, which acts as a safety net to suppliers which failed to secure enough gas in advance to match demand, went up to pounds 5. It compares with the lowest price during December of just 12p a therm.

Transco, which runs the pipeline network and manages the flexibility market, said it had spotted the potential for demand to outstrip supply early in the day. "We were buying in gas to cover that eventuality and we sent a warning out to shippers that it could be expensive," said a spokesman.

It was unclear whether any suppliers had been forced to buy gas at this price, which could have left them nursing heavy losses. The flexibility price slipped back as the weather eased, but still averaged pounds 1.57 during the day.