Agencies
British energy bills are set to start rising again this autumn, the sector regulator announced on Friday, sparking fears that fuel poverty will worsen amid an ongoing cost of living crisis. The cost of household electricity and gas had been falling from peaks reached after Russia’s invasion of Ukraine that contributed to the soaring cost of living.
But energy market regulator Ofgem said the price cap that suppliers can charge customers will increase by 10 percent from October, adding around £12 ($15) a month to the average bill. A typical household bill will rise to about £1,717 per year, Ofgem, which sets the cap every quarter, detailed in a press release. It had issued reductions in April and July.
The regulator cited “rising prices” on international energy markets due to “increasing geopolitical tensions and extreme weather events driving competition for gas”. It said that despite the rise for the October to December quarter, the cap will still be six percent lower than for the same period last year.
It will be almost half as low as at the height of the energy crisis in 2022 following Russia’s invasion of its neighbor in February that year, Ofgem added. But National Energy Action, a UK fuel poverty charity, warned that the increase would “plunge 400,000 more UK households into fuel poverty this winter”, taking the number to six million. The charity said the problem would be compounded by UK finance minister Rachel Reeves’s recent decision to scrap winter fuel subsidies for 10 million older citizens.
Energy minister Ed Miliband acknowledged that the cap rise “will be deeply worrying news for many families”, pinning the blame on the Conservative government ousted by Labour in last month’s election. “We will also do everything in our power to protect billpayers, including by reforming the regulator to make it a strong consumer champion,” he added.
Ofgem chief executive Jonathan Brearley said the price rise was “driven” by Britain’s “reliance on a volatile global gas market that is too easily influenced by unforeseen international events and the actions of aggressive states”.
Labour has pledged to reduce the UK’s dependency on foreign energy through a publicly owned body called Great British Energy that intends to spur investment in domestic renewable projects.
