As the latest reduction in the energy price cap comes into force, households are being warned of a huge rise in bills due to rising wholesale gas prices.
The cap, which limits what suppliers can charge per unit of energyfell 7% overnight following the latest three-month review by industry regulator Ofgem.
The reduction has meant typical 12-month bills will be around £500 cheaper than a year ago.
It left the average bill at £1,568 – a figure that will apply until the outcome of the next review comes into force in October.
However, a report from the Energy and Climate Intelligence Unit (ECIU) said on Monday that consumers should prepare for an additional hit of up to £600 during next winter, largely due to higher wholesale prices.
Pointed at a possible £200 price limit increase from October based on calculations by some analysts, suggesting that it was plausible that the total could remain at this level until June.
A calculation, by experts at Cornwall Insight and released on Friday, predicted a 10% rise – or £155 – from October 1 to £1,723 a year, but said there was still uncertainty over the future path of the market.
Consumer groups say there is an alternative to the price cap, pointing to a growing number of fixed-rate deals in the market following a dearth of competition in recent years.
European wholesale costs are again high for this time of year based on pre-energy shock standards.
Recent pressures have included strong competition from Asia, especially China, for liquefied natural gas (LNG).
This replaced some of the Russian natural gas volumes that were eliminated following the February 2022 invasion of Ukraine.
A planned extension of the European Union’s sanctions regime against Russia will see its LNG exports targeted for the first time – potentially putting even more pressure on supplies across the continent.
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UK household gas and electricity costs averaged just under £1,090 before the Russia-Ukraine war.
The ECIU report states: “By September 2025, the average household could have paid an additional £2,600 on energy bills during the ongoing gas crisis.
“With the government also spending £1,400 per home at the start of the crisis, the total extra costs could be £4,000 per home and rising.”
Energy has been among the major battlegrounds of the elections.
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Much of the debate has centered on costs, but the impact of gas use in particular has also fueled discussion about the UK economy. climate commitments.
Simon Cran-McGreehin, head of analysis at the ECIU, said: “The UK’s high reliance on gas for electricity generation and heating has cost bill payers £2,000 so far during the gas crisis and the economy as a whole dozens of billions of pounds.
“Common-sense measures such as investing in insulating the poorest homes, switching to electric heat pumps and accelerating British renewables will leave us less vulnerable to the vagaries of international gas markets.
“North Sea gas production is declining, so unless we make the switch, we will become increasingly dependent on foreign imports.
“The math is clear: When it comes to energy independence, new drilling licenses are a sideshow that make a marginal difference compared to the immense amount of local energy that offshore wind and other renewables can generate. “
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EU sanctions on Russian LNG could have gone much further
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Emily Seymour, editor of Which? Energy, said: “Consumers will be relieved to know that the price cap is falling by around £122 for a typical family from 1 July.”
She added: “With the price cap expected to rise again in October, many consumers will also be wondering whether they should fix their energy deal.
“There is no ‘one size fits all’ approach, but the first step is to compare your monthly payments over the price cap with any fixed agreements to see which is the best option for you.
“As a general rule, if you want to fix it, we recommend looking for deals as close to the July peak price as possible, no longer than 12 months and no significant exit fees.”
This story originally appeared on News.sky.com read the full story
