Britain’s Ofgem says energy bills would top £4,200 without help

Britain’s energy regulator Ofgem said its price cap on average household energy bills would rise by about 21 percent to £4,279 ($5,172) a year from January to the end of March 2023.

However, households will not pay that amount as Ofgem’s price cap has been replaced by a government-backed price guarantee, set at £2,500 per year for average consumption until the end of March 2023.

The government bailout, aimed at cushioning consumers from the economic shock of the war in Ukraine, comes as Britain faces what is likely to be a protracted recession.

Ofgem’s announcement means the government measure will save typical households around £1,779 a year compared to what they would have had to pay under the regulator’s cap.

But even with the help, the average bill of £2,500 a year this winter is almost double what households paid last year.

The government price guarantee increases to an average of £3,000 per year from 1 April to the end of March 2024.

Analysts at Cornwall Insights predict that the latest Ofgem cap means the total cost of the government’s energy bill support scheme is likely to reach £38bn-£42bn over the 18 months it will be in place.

European energy prices started rising as the world emerged from COVID-19 lockdowns, then surged in February following Russia’s invasion of Ukraine.

As a result, the wholesale cost of gas has risen and the price suppliers have to charge per unit of energy has risen sharply, prompting the government to step in to help consumers

https://www.independent.ie/business/world/uks-ofgem-says-energy-bills-would-hit-over-4200-without-help-42169726.html Britain’s Ofgem says energy bills would top £4,200 without help

Fry Electronics Team

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