Energy price cap in Great Britain to rise by 13% from July | Energy bills
Households will face the steepest summer rise in energy charges in four years after months of rising market prices led the government to raise the energy price cap for Great Britain by 13%.
Under this cap, the average gas and electricity bill will rise to the equivalent of £1,862 per year from July to the end of September, taking into account the increase in global energy market prices caused by the war against Iran.
Great Britain’s energy regulator Ofgem sets the maximum price a supplier can charge for each unit of gas and electricity based on the cost of supplying energy to homes, including average wholesale market costs in the months before each new cap kicks in. The cap also includes the maximum daily flat rate (fixed daily charges charged for a connection regardless of how much or little energy people use).
Under the new energy price cap, electricity charges for households paying by direct debit will rise from the current rate of 24.67 pence per kilowatt-hour to 26.11 pence per kWh, while gas charges will rise from 5.74 pence per kWh to 7.33 pence per kWh.
The war in Iran has stifled oil and gas exports from the Gulf, causing the largest energy supply shock in history. Gas prices in Europe have more than doubled their pre-crisis levels and are nearly three times higher than before gas exports to Europe stopped after Russia invaded Ukraine.
For motorists, the crisis saw petrol prices rise almost 20% at the pump on Tuesday to an average of 159.43 pa a liter, while the price of diesel rose more than 30% to 184.96 pa a litre, according to the RAC.
While the rising cost of energy this summer is expected to be troublesome for households, the bigger concern are bills from October onwards, when households typically start using more energy in the autumn and can expect higher bills as a result.
Rising bills are expected to add to the record energy debt accumulated by households since Russia’s invasion of Ukraine triggered a gas supply crisis for Europe.
Unpaid energy bills reached a record level of £4.5bn earlier this year, according to the latest official data. Some of these debts are paid by other bill payers through the £52 annual charge built into the energy price cap.
