The price the Government will pay to shield households from enormous energy bills will more than double in the new year after Ofgem raised the price cap. The decision will not increase the amount consumers have to pay to use gas and electricity.
But it will force the Treasury to pay 33p per unit of electricity and nearly 7p per unit of gas that homes across Great Britain use. This will push up the cost of running the Government’s energy price guarantee from £7.8 billion in the last three months of 2022 to £15.1 billion in the first three months of next year, according to estimates by energy consultancy Auxilione.
It is set to add to the massive strain faced by the public purse in coming months due to soaring gas prices. Last week the Office for Budget Responsibility estimated it could cost £6.5 billion to deal with the fallout from failed supplier Bulb Energy, which collapsed a year ago.
