Gas prices are heating up just before the UK sets a new price cap for hard-pressed consumers (John Stillwell/PA)
(Picture: PA Wire)The price of wholesale gas in the UK has risen past the peak it touched straight after Vladimir Putin’s invasion of Ukraine, just a handful of trading days before the announcement of the UK’s new energy price cap for consumers.
A dizzying run higher for the price on which much of consumers’ bills are based entered its sixth session and reached £5.55 per therm, above the £4.93 touched in early March when Russian tanks were rolling toward Kyiv and a new high for 2022. Soaring energy prices have been driving the cost of living crisis ever since.
The UK’s new energy price cap will be announced on Friday. Ofgem’s current limit is set at £1,971 for Direct Debit customers and £2,017 via prepayment meters.
Wholesale prices have only fallen day-to-day only three times in August. With demand set to rise in the autumn when demand for heating kicks in, and with the Bank of England forecasting inflation of over 13%, there are fears bills could rise by as much as £1,500 in October.
Labour has called for the recall of Parliament to address rising energy bills, a move so far resisted by Downing Street amid the Conservative Party’s leadership contest, which will not choose between Liz Truss and Rishi Sunak as Boris Johnson’s successor as prime minster until September 5.
The government’s response to surging energy prices is unlikely to be clear until after that. In the meantime, a growing number of public figures -- from FTSE chief executives to small business champions and consumer advocacy groups, as well as the mayor of London – continue to call for the new prime minister to be ready to prioritise the cost of living crisis into the autumn.
Citizens Advice, which offers guidance to consumers facing rising bills, called last week for Ofgem to suspend the forced installation of pre-payment meters for customers behind on payments.
“Every day that goes by without a plan is another day without reassurance for people who desperately need it,” said Dame Clare Moriarty, Chief Executive of Citizens Advice. “We urgently need further support, otherwise we risk a winter of despair for millions.”
