Published on : 26/08/2022 – 10:06Modified : 26/08/2022 – 10:04
London (AFP) – Regulated energy prices will rise by 80% from October in the UK and gas and electricity bills might rise further “significantly” next year amid the crisis in the cost of living.
The authorized price cap will drop from 1,971 pounds per year per average household to 3,549 pounds from October, regulator Ofgem said on Friday.
“The increase reflects the continued rise in global wholesale gas prices, which started with the post-pandemic deconfinements, and were pushed to record levels when Russia slowly cut off its gas supplies to Europe”, argues the Ofgem.
Looking at the current trend, Ofgem warns that “prices might get significantly worse in 2023”.
This threshold being calculated according to the average of wholesale gas prices over the previous months, experts expect it to be raised to more than 4,000 pounds in January and up to 6,000 pounds in the spring.
The price of gas has approached in recent days the historic highs reached at the start of the Russian offensive in Ukraine.
“We recognize the massive impact this price cap hike will have on households across Britain and the difficult decisions consumers will have to make,” said Jonathan Brearley, chief executive of Ofgem.
Ofgem, employers, suppliers and associations are calling for immediate government action to avoid a “dramatic” shock for low-income households, already facing inflation at more than 10%, the highest in the G7 countries, while the British economy is flirting with recession.
According to the University of York, nearly two-thirds of British households are at risk of fuel poverty by next year.
“We are seeing a very stressful situation among our customers. (…) About a third are in a situation of fuel poverty and 20% more might become so”, underlines Philippe Commaret, commercial director of EDF for the United Kingdom. United, interviewed by AFP.
He adds that some households take desperate and dangerous measures for them, such as giving up heating or unplugging their refrigerator.
With many precarious homes dependent on rechargeable meters, “we left to see thousands (of homes) with sudden interruptions of electricity”, denounces the think tank Resolution Foundation.
“Help Is Coming”
Diane Skidmore, a 72-year-old pensioner who lives in social housing in south London on £600 (just over £700) a month, has seen her monthly bill drop from £25 to £45 in just over a year . She has just received a letter from her supplier asking her to plan for the next debits of 70 pounds.
“Everyone is going to have a hard time,” she told AFP, saying she intends to use sweaters and blankets to minimize her consumption.
She is worried regarding her neighbors whose electricity meter works on pre-payments: “they always find themselves in debt, and suddenly they don’t pay their rent otherwise the electricity and the gas are cut off”.
Economy Minister Nadhim Zahawi promised that “help is coming, with £400 off energy bills for all, £650 for vulnerable households and £300 for pensioners”.
Departing Conservative Prime Minister Boris Johnson has left this politically sensitive issue to the next head of government, whose name will be revealed on September 5.
The favorite to replace him, the very Thatcherite Liz Truss, had until then favored tax cuts more than direct aid which she describes as “bandages”.
On Friday, she seemed to soften her position, in a column for the Daily Mail: “If I am elected leader of the Conservative Party and Prime Minister, I will take measures (…) on immediate aid, but I will also tackle the root of the problem”.
“It’s time for the government to stop protecting the profits of the petroleum fuel giants and start protecting the people,” the director of the energy poverty association NEA said impatiently on Sky News.
The environmental NGO Greenpeace asks for its part to put energy savings back at the heart of government policy, in particular the insulation of deplorable housing in the United Kingdom, and to “turbocharge” investment in renewables, which have become cheaper. than gas, so that the country “gets out of its dependence on fossil fuels”.
© 2022 AFP
