In less than 18 months, the household heating bills will more than double by January.
The cost of energy bills is expected to surpass £3,000 for the first-ever time, causing a serious crisis in the cost of living for millions of households.
Experts from energy consultancy Cornwall Insight predict that the price cap for annual bills will reach £2,980 in October, before rising to £3,003.20 by January.
This means that household heating bills will more than double in 18 months. In October 2021, the price cap was at £1,278. Before soaring gas prices caused it to rise rapidly.
The global gas shortages that have gotten worsened by Russia’s war against Ukraine have caused wholesale gas prices to soar for many months.
The government has intervened to assist households by providing rebates on energy bills, council tax, and other assistance. This amount is approximately £1,200 for the most vulnerable households.
It is likely that it will be under pressure to increase its output given future increases in the expected scale. Households also face rising fuel and food costs.
At Cornwall Insight Dr Craig Lowrey stated to the BBC that “Together these measures will make a dent in the increases we’re projecting, but it won’t offset.”
“So, there is clearly the potential to seek further support from Government as long as these high-priced conditions continue. So we cannot rule out additional measures.”
He suggested that more could be done in order to increase households’ energy efficiency, so they use less electricity and gas.
“Every unit of energy counts, especially in times of high prices.” He stated that he believes the demand-side of things is equally important.
As countries recovered from the pandemic, demand increased and wholesale gas prices began to rise last summer. However, Russia’s war against Ukraine has increased the pressure by increasing concerns that Russia will cut off supplies to Europe.
Although Britain receives little gas from Russia directly, it is connected to European markets so there would be a significant knock-on effect if this happened.
The UK, Germany, and the Netherlands have all warned that they will need to use more coal in winter because gas supplies are limited.
Last month, Ofgem, an energy regulator, predicted that the price cap would reach £2,800 by October. The exact amount will depend upon wholesale gas prices through August.