UK

New energy price hikes forecast, despite billions in industry profits

Campaigners have claimed that the latest energy price forecasts show customers are being gaslighted by an industry that has made £483 billion in profits since 2020.

At the heart of the scandal is the system that sees electricity prices being set by the cost of gas up to 40% of the time under the marginal pricing rules.

Now, with the cost of gas rising to a two-year high in recent weeks, the over-reliance on fossil fuels in the country’s energy system is once again causing distress in households.

Warm This Winter spokesperson Caroline Simpson said: “It’s soul-destroying that there will be another price cap rise. What billpayers don’t know is that even their electricity bills are chained to gas prices. This over-reliance on gas – both for our heating and in setting the electricity price – is why we saw huge hikes in bills four years ago and now we are seeing prices  set to rise again.

“Instead, the public are being told by some politicians that net zero and green policies are to blame. This couldn’t be further from the truth and we need to stop gaslighting people.

“Our bills are high and the ones who benefit are greedy gas and oil companies who are making billions. That is why we desperately need to develop our own renewable energy sources as the only way to achieve lower prices and energy security for good.”

Analysts predict the price cap is set to rise yet again in April when Ofgem makes their announcement a week today. That is because it is linked to the current gas price surge driven by the conflict in Ukraine, a colder than expected European winter and city market traders who buy and sell gas to desperate countries. 

Simon Francis, coordinator of  the End Fuel Poverty Coalition, said: “As volatile energy bills continue to be set by our reliance on global wholesale markets and driven by the cost of gas, it is even more vital that we see moves toward sustainable, cheaper, renewable energy.

“This of course needs to be combined with investment in helping people make their homes more energy efficient – especially those living in low quality private rented homes. But until then, consumers need to navigate a confusing array of energy tariffs. The key point to remember is to use your own energy usage when comparing prices and do not rely on industry averages which may hide the true cost you will pay.

“Customers must also look out for exit fees which may trap you into uncompetitive tariffs in the future. And, if a household is interested in moving to a ‘tracker’ style tariff, it is even more important to make sure you look at your own usage, the unit costs and the standing charges and check that they will offer you real value for money.”

The advice comes as the warnings in the media suggest that a typical bill could rise by more than £100 a year. Ed Miliband has urged the energy watchdog Ofgem to take action to protect consumers.  Nine million homes on variable tariffs are likely to be particularly hard hit by the price hike.

The number of people in England and Wales who sought help with energy bills jumped by 20% last year, according to Citizens Advice. With Labour’s axing of winter fuel payments to pensioners, that figure is likely to raise.

Image: https://pix4free.org/photo/2475/energy.html Credit: Pix4Free.org Energy by Nick Youngson CC BY-SA 3.0 Pix4free Attribution-ShareAlike 3.0 Unported CC BY-SA 3.0 Deed