One analyst warned that a spike in wholesale gas prices after Russia’s invasion of Ukraine could raise annual energy bills by more than £3,000 for millions of households.
Image: Tolga Akmen / AFP / Getty Images)
Energy bills could top £3,000 a year in England, Wales and Scotland from October, partly due to Ukraine crisisA related report warned.
Investec bank said the conflict, which has put pressure on soaring global demand, has sent gas and electricity prices soaring.
The price increase so far is being fueled by concerns about the reliability of supply after the invasion because Russia is the third largest oil exporter.
Investec expects the energy price cap, which limits what suppliers can charge, to hit £3,238 a year for the average home when it is adjusted next October.
The lid has been due to an increase of £693 to £1,971 in April.
Analyst Martin Young said the further increase in October, which will affect around 22 million households in England, Wales and Scotland, would be “devastating”.
Video not available
He said such an increase would “push a lot of people into poverty”, with many facing “Eat or Hot Dilemma in winter”.
“Without a sharp and significant drop in wholesale prices, we expect the October cap to rise significantly,” he said.
Russia is one of the world’s largest exporters of natural gas and there are fears Western sanctions could push the president away. Vladimir Putin to “weaponize” its resources and limit supplies to Europe.
But Boris Johnson say we need to be less dependent on Russian resources.
In the Commons, the Prime Minister acknowledged that the invasion would have “global economic consequences”. “The government will do everything it can to protect our people from cost-of-living consequences,” he said.
Any increase would boost already-record-high gas prices, after demand spiked as economies reopened following a global shutdown.
The price of oil has reached one an eight-year high on Thursday when Vladimir Putin launched missiles at the eastern cities of the country, causing a humanitarian crisis.
Gasoline prices in the UK yesterday averaged 149.5pa litres, although motorists in some parts of the country paid 161p. Diesel peaked at 153p.
Brent crude, the global benchmark, rose above $100.
Government sources say there is a high probability that the average price of petrol rises above 160p, while diesel could rise to 170p.
The price of refueling an average 55-litre family car will rise from £82.50 to £88.
Investec Says Prices Will Rise After Russia Invasion Ukraine and will continue to increase for many months.
That would increase wholesale prices around the world, including in the UK, which gets little gas directly from Russia.
Most of 30 energy companies have collapsed in the past year due to high wholesale costs, affecting 4.3 million domestic customers.
The time has come when the prices of food, manufactured goods and fuel have also skyrocketed, strangling the budgets of households.
The UK inflation rate is currently at a 30-year high of 5.5%.
The approval of the Nord Stream 2 gas pipeline, which runs from Russia’s Baltic coast to northeastern Germany, has been suspended because of the invasion of Ukraine.
The government says millions of households will receive discount on energy bills totaling £350 from October to alleviate the crisis.
However, £200 of this will be repaid, and Mr Young calls the support “a poorly disguised loan”.
https://www.mirror.co.uk/money/ukraine-crisis-warning-uk-energy-26326096 UK energy bills could hit £3,000 a year due to Russia and Ukraine crisis