The British government keeps raising taxes on energy, and businesses are feeling the pinch. Industrial gas prices rose 20 percent last year, due in large part to Britains climate change levy. As noted by Reuters (January 7, 2002), higher taxes exacerbate an already turbulent energy market in Britain. “UK prices have doubled over the last two years, partly because the opening of the UK/Belgium interconnector pipeline linked British prices to European gas prices which are indexed to oil prices.”

“Gas demand in Britain,” said Reuters, “has doubled over the last 10 years. Industrial, commercial and domestic use has risen 16 percent but usage in power generation has grown from virtually nil in 1990 to around 30 percent last year.”

Several German utilities have announced hikes in household power prices effective January 1, reflecting higher taxes and fees, reports Reuters (January 3, 2002). Customers served by the utilities will see their monthly power bill increase by about 5 percent, although some will see their rates go up by as much as 10 percent. Two thirds of the rate hikes are due to higher taxes, according to one industry spokesman.