FUEL POVERTY will be top of the agenda this week when representatives from energy firms, campaign groups and advisory bodies meet in Peebles for Energy Action Scotland's 25th annual conference.

In a year in which consumers have been hit by two hikes in gas and electricity bills, and oil prices hit record levels in July, many expect the challenge of rising fuel bills to come to a head this winter.

The Scottish government has a statutory commitment to eradicate fuel poverty - when households spend more than 10% of their income heating their homes - by 2016. But, after a steady fall following deregulation in the 1990s, bill payers have seen year-on-year hikes since 2002 - pushing a record 850,000 Scottish households into fuel poverty.

Gordon Brown's prediction last week that fuel bills would begin falling in the new year met were with scepticism by Energy Action Scotland's director, Norman Kerr. He said: "I'd like to see what has given him the confidence to say that, because that's not what we're picking up from suppliers. People say, Switch to another supplier and save money', but when they are all buying their gas and electricity from the same generators then we're all going to be paying roughly the same price."

In 2002, the average UK annual fuel bill was £600-£700 - now it is £1300-£1400. Scotland's colder climate, lack of access to the gas network in rural areas, and the fact a third of Scots homes are unsuitable for loft and cavity wall insulation makes it, comparatively, the most energy-demanding nation in the UK - and least able to improve energy efficiency.

As a result, many homes will be unable to benefit from the £321 million pledged by energy firms in September to help cut customers' usage. Alternative sources, like solar water-heating panels, would still cost customers £2000-£3000, even with a discount, said Kerr.

"If you're living in fuel poverty and struggling to pay £70-£80, you'd be as well asking for £3m because they just don't have it. We're pressuring the Scottish government to bring these into its mainstream grant programme so people in these types of homes can get free access to these kinds of measures."

For Poverty Alliance director Peter Kelly, fuel price is too often overstated in an issue which is fundamentally about poverty. He said: "We must insulate properties where we can, and we can change the pricing structure, but unless we are able to address low incomes then a lot of that good work will be undone."

Ofgem recently demanded that suppliers ensure their "social tariffs" - packages for vulnerable consumers - give the best deals. Previously, those without access to dual-fuel or online offers - often rural or elderly customers - were still worse off despite their "social" deals.

"Most companies have a reasonable social tariff," said Graham Blount, chairman of the Scottish Fuel Poverty Forum. "But there are still people who should be on social tariffs who are not.

"In many ways the 2016 target looks further off than it did a year ago because we've seen such huge increases in fuel prices in that period."