Energy prices could rise by another £1,000 to £3,000 a year by October after Putin’s Ukraine invasion, industry boss says
- Emma Pinchbeck of Energy UK said the energy price cap could rise to £3,000
- The cap is set to be reviewed in October with the Ukraine war set to hike prices
- The cap is already set to increase from £1,277 to £1,971 from April 1
Energy prices for millions of households could rise by another £1,000 by October, the boss of the industry body has warned as gas prices continue to soar.
Emma Pinchbeck, chief executive of Energy UK, said the average household might be forced to pay between £2,500 and £3,000 per year for their supplies.
It would mean energy prices more than doubling from the current cap, which is set at £1,277 per year for the average household. The cap is already scheduled to rise to £1,971 from the beginning of April.
However, the predictions are very early and based on today’s data, so are likely to change before the October price cap is announced this summer.
Regulator Ofgem has warned against early predictions, saying that the forecasts six months ago ended up being very wrong.
Ms Pinchbeck told BBC Radio 4’s Today programme: ‘It’s a really worrying time for both customers and industry, and we’ve been saying since the autumn that we expect bills to go up again in October.
‘I think, with what we’re seeing in Ukraine and in the oil and gas markets, we’re now expecting those to go up further.
‘We’ve seen public figures quoting bills at around £3,000 in October. We know they’ll be around £2,000 from April when the price cap goes up.
‘It’s very, very hard to predict, and it’s all highly speculative because the hallmark of the market at the moment is volatility.
‘The important thing to anyone listening to this on their bills is that there is help available, particularly for vulnerable customers, and we are going to be working with Government to try to get extra support in place.’
She added: ‘If this turns out to be an enduring situation in the market, you can expect bills to be anywhere between £2,500 and £3,000 in October, depending on the tariffs that people have, and what happens in the market.’
She also warned of ‘impacts on industry’ over the coming months.
More than two dozen energy suppliers have gone bust in the last year after being caught in the squeeze between the price cap and rising gas prices.
On Wednesday, analysts at consultancy Cornwall Insight said they think the price cap might hit £2,900 for the average household in October.
They said £400 has been added to their predictions for October’s cap since Wednesday last week, when Russian President Vladimir Putin launched an unprovoked attack on Ukraine.
Cornwall senior consultant Dr Craig Lowrey said: ‘Following the catastrophic events in the Ukraine and the subsequent supply concerns across Europe, wholesale prices have been extremely volatile.
‘On Friday we saw our energy price predictions fall by over £200, only for them to rocket to the record levels we see today.
‘With the response of countries and companies to the actions of Russia changing almost hourly, there is no doubt these peaks and troughs are set to continue at least in the short term.
‘The UK Government will need to be ready with ways to mitigate the impact on consumers, with an increase in financial support to households likely to be a necessity, in addition to renewed considerations on support to business customers.’
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