Ofgem boss, Jonathan Brearley: 'If you look at gas prices, it is something we don't think we have seen before at this pace' (Image: Handout)Īccording to the National Institute of Economic and Social Research (NIESR), around 1.5million households in the UK will struggle to pay food and energy bills due to a deepening cost-of-living crisis that is likely to plunge Britain into a recession. For some, not being able to afford rising energy bills is literally a matter of life and death."Ĭurrently, households are facing soaring energy bills as well as forecasts of inflation hitting 10 per cent and benefits and wages failing to keep up with the increase in prices. "I talk to customers on a regular basis, and I know how tough rising energy prices are for many households and businesses. Mr Brearley also said that for some people, not being able to properly afford their energy bills was a matter of life and death, adding: "Many of you in the room know the impact the gas crisis has on the sector, but most importantly it is putting huge strain on the customers we serve. READ MORE: Boris Johnson urged to bring forward emergency Budget amid cost of living crisis
It comes after independent energy market analyst Cornwall Insight shared its prediction that a typical UK household will face an annual energy bill rise of £600 from October, which would take a home's average gas and electricity bill to £2,595, The Mirror reports. The market remains highly volatile and as a result we do expect further price increases later this year," he added. "Prices fluctuated from nearly 16 times the average price last winter at its highest to around four times what we'd usually see. Thanks for signing up to the InDaily newsletter.British households are likely to face yet another rise in energy prices later this year, an Ofgem boss has warned.ĭuring a speech in Glasgow, Ofgem chief executive officer Jonathan Brearley said energy market prices remain "highly volatile" since the Russian invasion.
The best local news every workday at lunch time. Wood said retailers, even those that are well hedged, would need to put up prices at some point to reflect the higher wholesale costs.Īnd the government-regulated price ceilings in most markets would also be increased, he said. McConnell said prices would rise for some customers within months but it was difficult to say by how much. “Others (typically smaller, second-tier retailers) might be more exposed and have to raise prices more to cover their position.”
BILL WRISE FULL
“Some larger retailers, in particular, might be well covered and not have to pass on the full rises to their customer bases,” he said. These contracts allow retailers to lock in electricity supply ahead of time, shielding them from future rises or falls in wholesale costs.īut those who haven’t locked in lower prices will be forced to pass on higher wholesale prices much sooner, McConnell said. How quickly rising wholesale prices flow through to households will depend on the protection afforded to retailers by their hedging contracts. “It may be visible before the federal election.” When power bills could rise “This will flow through to consumer prices,” Wood said. Notably, South Australia is also less reliant on fossil fuels than other states, somewhat protecting its electricity grid from higher coal prices.īut power prices have gone up considerably in all states and territories. Victoria and South Australia – connected to Victorian generators – have been insulated because the brown coal that feeds their markets is not exported overseas, Wood said. Wholesale prices have risen most across Queensland and NSW, where power stations are more exposed to changes in the global coal prices. “The forward prices don’t suggest it gets better any time soon.” “Perfect storm is a good term … it’s just about unprecedented,” he said. Grattan Institute energy program director Tony Wood said “everything that could go wrong” to put upwards pressure on wholesale prices has gone wrong.
Vikings, lamb and fine wine feature at Clare Valley food festival Search All categoriesĬoal and gas prices have been going up due to global factors, namely shortages in Europe that have been exacerbated by the war in Ukraine.Īnd despite the recent surge in renewables, coal and gas still make up the majority of Australian electricity supply, meaning higher prices lead to higher household energy bills.
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