Energy bills support will double to £5bn a month
SHIELDING people from soaring energy bills will double to up to £5billion a month.
Regulator Ofgem announced yesterday that the price cap would rise to 67p per unit for electricity and 17p for gas from January.
It would have made the typical household bill rise to £4,279 a year – but the Government has said that until April, electricity will cost 34p per unit and gas 10.3p.
However, the cost of keeping the price guarantee will rise from £7.8billion in the last three months of 2022 to £15.1billion in the first three months of next year, according to energy consultancy Auxilione.
Introduced on October 1, it limits how much households pay for wholesale energy, taking the average annual bill to £2,500.
The latest Government cap will be in place until April, when the threshold is raised to £3,000.
Rocio Concha, of consumer champion Which?, said: “The price cap rise will be hugely worrying for consumers, but they should remember bills are protected by the Government’s guarantee scheme.”
Craig Lowrey, of energy consultancy Cornwall Insight, said the cap hike would be “concerning” for the Treasury, which will be “shouldering the billions of pounds needed to compensate suppliers the difference”.
As gas prices soared, the cap has had to rise from a little over £1,100 just 14 months ago.
Vladimir Putin’s war in Ukraine and surging inflation has led to rocketing energy prices. Meanwhile, ministers will launch
a public information campaign directing people towards “authoritative sources of advice” on managing energy and saving money.
It could show households how to knock up to £420 off their bills, but Levelling Up Secretary Michael Gove said it would not be “nannying or patronising”. Money-saving tips may include reducing boiler flow temperatures, not leaving electrical devices on stand-by and swapping baths for showers. Initial reports suggested the scheme would cost £25million, but insiders said it would be significantly less. Chancellor Jeremy Hunt told MPs: “For most people we need you to play your part in reducing our energy dependency. We’ve got this national ambition to reduce energy consumption by 15 per cent.”