‘£50,000’ average energy bills cost over 25 years
HOMEOWNERS in Portsmouth could end up spending £50,000 on their energy bills in the next 25 years, research suggests.
A study from Admirals claims that on average, household energy bills could climb to £2,000 per year over the next quarter of a century.
It comes after Ofgem announced that the price of energy would be capped at 54 per cent in April.
Energy prices are on the rise due to supply outstripping demand as the world reopens following the Covid pandemic.
Market analyst at Admirals, Roberto Rivero, said: ‘One of the key drivers of the recent surge in inflation has been the rising global prices of oil and gas and, unfortunately, this is now impacting household energy prices in the UK.
‘The pandemic caused many businesses to temporarily close and forced citizens to remain at home – as the world reopened, demand recovered faster than supply could handle, with many oil producers struggling to increase their production.
‘Although higher energy bills are concerning for everyone, energy prices are cyclical by nature, meaning that they won’t stay high forever. Put simply, when oil and gas prices are high, producers expand their output to take advantage of high prices.
‘This increase leads to supply gradually catching up with demand and, eventually, overtaking it, which causes prices to fall again.’
Admirals claimed these price rises have been exacerbated by the ongoing conflict between Russia and Ukraine – and added that the current high prices, coupled with its forecast for the future, prove the UK cannot continue to rely on fossil fuels.