WITHIN hours of The National Grid warning that gas demand was outstripping supply, the price of wholesale gas had quadrupled.

The warning was made after a number of factors ranging from the unexpectedly cold weather to the country's main gas storage facility in the North Sea being out of action due to a fire. Gas companies were also blaming the shortage on a lack of supplies from Europe.

But for all the home and business owners who have seen their energy bills hiked by a quarter in recent weeks, the warning came as a worrying sign.

Although Centrica, the parent group of British Gas, said yesterday there was no further plans to increase prices further, a spokeswoman for watchdog organisation energywatch said: "It is inevitable that the higher prices being paid by suppliers now will reach the consumers at a later date."

British Gas, which has 53 per cent of the residential gas market, hit consumers with a 22 per cent rise on March 1, following on from a 14 per cent increase in September and a 12 per cent hike 12 months earlier.

Npower increased prices for the second time in three months last week, while Powergen's six millions customers saw gas prices soar by 24.4 per cent for domestic use and electricity prices by 18.4 per cent.

Businesses are also fearful they could end up bearing the brunt of any price hikes if energy companies are too reluctant to pass on further increases to domestic users.

And with talk of droughts and hosepipe bans, water also appears to be in short supply. One water company in Kent has been given approval to force householders to install water meters - and other companies are expected to follow suit.

So, what can be done to save energy and keep household bills down and what are the energy alternatives? We find out.

GAS

Making your home more energy efficient can really slash the gas bills.

* Choosing a high efficiency condensing boiler could shave a third off your bills.

* Installing cavity wall insulation will save up to £120 a year on heating bills.

* Insulating the loft can ensure savings of between £140 and £170.

* Turning your thermostat down by 1C could cut your heating bills by ten per cent.

* Consider draught proofing, double glazing and close the curtains to stop the heat escaping after dark.

ELECTRICITY

Britons waste the equivalent of around two power stations' worth of electricity each year by leaving TV sets and other gadgets on standby.

* Always turn off the lights when you leave a room.

* Replace light bulbs with energy-saving recommended ones which last up to 12 times longer than ordinary light bulbs.

l Defrost your freezer regularly

* When replacing electric appliances, look for ones with energy-saving logos.

WATER

* A family of four can save 220 buckets of water a month simply by turning the tap off when they brush their teeth.

* Wash vegetables and fruit in a bowl rather than under a tap. Leftover water can be used for watering house plants.

* Use the minimum amount of water when boiling in saucepans and kettles to save energy as well as water.

l Dripping taps can waste up to four litres of water a day.

* Collect rainwater in water-butts and use a watering can in the garden instead of a hose.

HOW TO SWITCH SUPPLIER

If your bills are still sky high even after you've made a few energy saving changes then changing supplier could get you a better deal. Tim Wolfenden, product strategy manager at uSwitch.com, says companies such as his can make switching even easier.

"With variable price rises from different suppliers anybody who has never switched a supplier could probably save 20 per cent of their bills - £200 a year out of the average £1,000," he says.

Here are a few tips to consider:

* Don't ask a man or woman on the doorstep because Which? discovered recently that the company with the biggest number of energy salesmen knocking on the door was British Gas - one of the most expensive utility providers.

* Don't sign up for a new deal with a supplier without checking if an exit penalty is payable.

* Comparison or switching companies can show you which energy company can provide the cheapest deal. Four of the biggest are - simplyswitch.com, uswitch.com, energyhelpline.com and theenergyshop.com. The "switchers" earn commission of up to £50 per time for ever customer who goes to a new supplier.

* Take advantage of deals to bring the bills down. British Gas, for example, claims its customers who pay by direct debit save an average of £64 per year on gas and £17 on electricity. There can also be deals for taking gas and electricity from one supplier.

* Some suppliers also offer fixed or capped price deals running for several years ahead, which can give the security of knowing your bills can't rise. EDF's fix until 2008 charges consumers slightly more than a standard rate while Powergen's cap runs to 2010. British Gas customers can be fixed until 2010 or up to 2009 for dual fuel customers.