High wholesale prices have led to a surge in energy costs for consumers and businesses across Europe, but the pressures faced by UK consumers have been particularly acute. Energy suppliers complain that they, too, have been hit by this year’s surge in wholesale gas prices and that the retail sector is particularly fragile.
While governments in other countries have intervened to protect households from surging bills, in Britain, regulator Ofgem has raised the country’s energy price cap 54 per cent, pushing up average bills for 23mn households to about £2,000 a year. In France, for example, rises in electricity costs have been limited to 4 per cent.
Chief executive Jonathan Brearley has warned that he expects bills to rise another 40 per cent to £2,800 in October, when the cap is next updated.
Many consumers fear being forced into fuel poverty, a reason a UK windfall tax has widespread public support. Despite the government’s reluctance to impose such a levy, chancellor Rishi Sunak is considering a broader tax that could include companies that generate electricity and have been benefiting from high wholesale power prices.
In fact, it is not just wholesale prices that are behind the higher bills in Britain. Among the extra costs hitting UK households is a £68 contribution to rescue customers of the more than 30 energy suppliers that have collapsed in the past year. There are also concerns that weaker operators have sought to front-load customers’ bills to secure funds to support daily operations.
