Consumers should prepare for higher energy prices as power plants close, foreign gas supplies shrink and demand continues to increase, energy regulator Ofgem has warned.

Writing in the Daily Telegraph, Ofgem chief executive Alistair Buchanan said demand for gas across the world is rapidly increasing, but at a time when the UK may be facing a shortfall in energy supplies.

He said the UK will need to import more gas, which could push prices up.

Buchanan said: "No-one doubts there is plenty of gas out there, but what is critical to Britain is how much will be available over the next five years and how much we will have to pay to ensure it comes here."

He added: "We have to face the likelihood that avoiding power shortages will also carry a price.

"If you can imagine a ride on a rollercoaster at a fairground, then this winter we are at the top of the circuit and we head downhill – fast."

However, Buchanan said Ofgem won't let companies take advantage of consumers by using a high-price environment to line their own pockets.