The pre-Christmas chill is brining British radiators back to life (Yui Mok/PA)
(Picture: PA Wire)The winter surge in gas prices has gathered speed as the cold snap tightened its grip on London and the UK and people fired up their boilers to get warm.
An official industry measure tracking the cost of the commodity is now up sixfold in the six weeks from the start of November, meaning that the government’s intervention in the market to keep household energy bills down is getting more expensive for the taxpayer.
The System Average Price of Gas (SAP) rose past levels touched in early-September, when prices were heading down from the peaks touched in August at the height of fears about potential supply shortages in winter due to the war in Ukraine.
Since then, improved storage capacity and unseasonably warm autumn weather calmed worries and contained demand, with Brits keeping away from the thermostat until late November. Since then, the rise has been steep, as the chart shows, but the price has stayed under August peaks.
Even so, prices are elevated levels compared with previous years, after Vladimir Putin’s act of aggression upended the market for natural gas on which so much of Europe depends for its energy.
Rising energy price after the start of the war have been the main driver of soaring inflation that has stoked the 2022 cost of living crisis and the wave of interest rate rises from major central banls to try and tame the first set of doubl-digit price rises seen in major economies for around four decades.
Bill payers are protected by the government’s Energy Price Guarantee, which caps the annual cost of the average amount of gas used by UK households at £2,500 this year, although consumers will still pay for the amount of energy they use. It will rise to £4,279 from January.
The SAP tracks the day-to-day commodity market and is used by the National Grid as it keeps supplies running smmothly by balancing out supply and demand. It can be subject to large day-to-day swings in line with technical aspects of distribution, but over time it shows the general trend in prices and is also tracked by the Office for National Statistics.
