Energy bills in the UK could rise by as much as 50 per cent in spring amid a “national crisis” in wholesale gas and electricity prices.
The energy industry has warned that energy bills in the UK could rise by as much as 50 per cent in spring amid a “national crisis” in wholesale gas and electricity prices.
Energy UK has called in the government to step in to help reduce the cost of rising energy bills as soaring wholesale prices cause dozens of energy companies out of business.
Emma Pinchbeck, chief executive of Energy UK, said when speaking to BBC Radio 4 said: “Domestic energy prices are going to go up 45 per cent to 50 per cent in the spring.”
“It is looking pretty serious for the spring. This is a system-wide issue now. We are asking for the Treasury in the UK to intervene as others have [in Europe],” Pinchbeck said.
Even though the wholesale prices are still climbing steadily, the price cap on energy bills prevents companies from passing the costs onto consumers. Since October 1, the price cap (which is set by Ofgem)has been set as a record £1,277.
The cap is set to change on April 1 when Ofgem will allegedly increase the cap significantly, which will mean a significant rise in consumers’ bills.
“We have had record-breaking gas prices across Europe since September and over the last couple of weeks prices have spiked again and they are at levels we frankly have not really faced in the industry,” Pinchbeck said.
“Particularly not in a winter period, with the UK in the middle of a pandemic, and other cost of living issues and inflation.”
“A significant proportion of the bill is policy costs.”
“Many other governments across Europe have reduced taxes or VAT on bills. In the UK that would save around £90 per customer. There are also policy costs on energy bills that government was consulting on removing, on electricity bills primarily, they could bring that forward. That saves about £190 per customer.”
The chief executive of London-listed Good Energy Nigel Pocklington said that the situation is a “national crisis.”
“Wholesale gas and power prices have increased to unprecedented levels over the last three weeks, creating an extremely difficult operating environment for every business in the industry,” he told the Financial Times.
The UK’s fourth biggest energy supplier, EDF, said the situation was “critical” and warned that the government must “act now to support energy customers.”
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