Energy prices continue an unprecedented rise
UK’s Ofgem Warns Households to Prepare for Difficult Winter
Britain’s energy regulator Ofgem warned that bill payers face a challenging winter ahead as energy prices continue an unprecedented rise that could push millions into poverty.
Bills are set to climb more than 60% in October to record levels and again in January, as surging energy prices push up the cost of supplying households. The UK has a cap on tariffs that shields consumers from daily spikes in wholesale prices but there’s little protection from gas prices that have tripled in just the last year.
“I know this situation is deeply worrying for many people,” said Jonathan Brearley, Ofgem’s chief executive officer. “The trade-offs we need to make on behalf of consumers are extremely difficult and there are simply no easy answers right now.”
Ofgem said Thursday that the price cap will be adjusted quarterly instead of twice a year to better adapt to market volatility. That will potentially help prevent more supplier failures, following more than two dozen companies that exited the market last year as they were unable to pass on higher costs to their customers. If and when energy prices fall, those savings can be more quickly passed on to households as well, the regulator said.
“Households will face a two-stage cost of living crisis this winter, thanks to Ofgem’s confirmation that energy bills will go up in October and again in January,” Simon Francis, coordinator at the End Fuel Poverty Coalition said. “It is simply inhumane.”
One in three households — more than 8 million — are expected to be pushed into fuel poverty in October, according to charity National Energy Action.
While the price cap, which covers about 24 million British households, is meant to protect customers, it can only do so much under the current conditions. The government previously announced a £400 discount off bills from October to help bill payers with rising costs, but pressure is mounting for more support as prices continue to soar into the winter heating season.