A massive 80% hike in the price of wholesale gas is worrying the UK’s panel producers, already suffering from keen competition.

Gas prices rose from 15p to 34p a therm between September and October, but main users say the increase needs to be justified as demand for gas is not particularly high and the supply is not low.

Energy minister Stephen Timms has been lobbied and the energy regulator Ofgem is making enquiries to decide whether a formal investigation should be carried out.

Kronospan Ltd commercial director Howard Jones, who met Mr Timms recently, said: “The UK has gas and oil reserves which are the envy of many – yet it has one of the highest energy costs in Europe.”

&#8220The UK has gas and oil reserves which are the envy of many – yet it has one of the highest energy costs in Europe”

Howard Jones, commercial director, Kronospan Ltd

He said energy was Kronospan’s second biggest direct cost after timber and added: “Despite our multi-million pound investment in energy schemes such as CHPs and boilers powered by renewable sources, we still find our international competitiveness continually eroded.”

Wood Panel Industries Federation director-general Alistair Kerr said rising energy prices were an issue, particularly in an energy intensive industry such as panel products. He added: “If you have a significant rise in gas prices it knocks competitiveness and the reason for the rise needs to be examined to see what action, if any, can be taken.”

The Timber Trade Federation head of public affairs Mark O’Brien said The Federation was concerned about the rise in gas prices and would be asking members to contact Ofgem if they have faced higher prices during September and October.