Energy bills for most British households are poised to rise again this spring, as an uptick in wholesale gas prices and escalating network charges put renewed financial pressure on millions of families.
Forecasts from Cornwall Insight, the energy consultancy, indicate that Ofgem’s price cap could nudge up by around 1 per cent to £1,762 a year for a typical dual-fuel household in April, reversing an earlier prediction of a modest decline. The new figure is slightly above the £1,738 cap that takes effect from January and continues the marked increase from pre-crisis averages of roughly £1,100 annually.
Other proposed adjustments to the price cap—such as allowances for energy-intensive industries—could add a further £20, bringing the total to £1,782 a year.
Europe’s gas prices have seen a volatile year. After dipping to €24 per megawatt-hour in February, they have surged back near a one-year high of €45.5 per MWh. Demand from Asia, driven higher by extreme summer temperatures, has intensified global competition for liquefied natural gas (LNG), on which Britain is increasingly reliant as it reduces its dependence on Russian pipeline supplies following the invasion of Ukraine.
Ofgem, the UK’s energy regulator, has warned that ongoing reliance on LNG imports is likely to keep gas markets volatile into next year. Craig Lowrey, principal consultant at Cornwall Insight, described the outlook for 2024 as “a perfect storm of regulatory changes and market turbulence,” adding that “while significant rises in price are currently unlikely, the degree of any increase will hinge on how the market and regulatory reforms evolve.”
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