The head of Octopus Energy has warned energy prices could rise even further in the winter.
Until now Ofgem’s price cap, which is reviewed every six months, has protected customers from the rising costs. Fuel poverty charity National Energy Action (NEA) warned the cost of heating an average home has now doubled in 18 months, leaving 6.5 million households unable to live in a warm, safe home across the UK.
The change, which happened on April 1, will add an average of £58 onto monthly bills for the typical household and experts predict that bills could rise further, to more than £2,300 per year for the typical household in October.
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Chief Executive Greg Jackson told LBC: “Global energy prices is one of the most volatile markets and so it’s a fool who will make a strong prediction. But what we do know is that the next energy price cap period is being set by the prices we’re seeing now, because there’s a sort of lag in the system.
“So unless there’s a very rapid fall in the global prices, energy costs for people in the UK will stay high over the winter. They could even be higher. We just don’t know. But of course we’re now in a situation where there are two factors that really make a difference.
“First one is whether there are any more strategic moves related to Russia, whether the gas taps get turned down or not. And the second is what the weather does.
“Essentially, what matters now is Europe going to be filling its gas storage because we’ve got mild weather? Or is it going to be emptying it because we’ve got bad weather? So depending on the weather between now and the winter, there could be a very big difference in energy prices in the next few months.”
Mr Jackson has said the company will help people struggling to pay their bills and said there is “no hiding” the fact that energy costs have risen “dramatically”, as he acknowledged the cost-of-living crisis is “very real”.
He said the “sad reality” is that many people lost their jobs during the pandemic and went from being able to pay their bills to finding them unaffordable.
He told LBC: “Where people do their very best, companies like ours will work with them to get payment plans in place, to provide some assistance, to work with them on their whole income and expenditure.”
Mr Jackson said there are also people who can pay but choose not to, adding that a different approach has to be taken in that scenario.
Mr Jackson was asked if he can promise that his company will not send the “heavies” round if people cannot pay and instead be “generous”.
Mr Jackson told LBC the challenge is that all those who do not pay add to the costs for everyone else.
But he added: “We don’t send the heavies. We work with people to try and get them through times like this – listening, helping where we can.
“Our company has never sent the heavies round and we’re not going to.”
As of April 1, The energy price cap has soared, adding hundreds to an average household's yearly electricity and gas bill, while water bills and council tax are also set to rise. The cost of dining out could also creep up this month as businesses face higher VAT rates.
Also from this month, households can apply for a £5,000 grant to replace gas boilers with new low carbon heat pumps. Experts estimate that households that have switched could shave £260 off their annual energy bills from April.
