Energy bills are set to rise even higher next year as suppliers warn of ‘nationwide crisis’ and call on government to intervene after cost of gas soared
- Leading bodies in the energy sector have called for urgent intervention in crisis
- Cost of gas in wholesale markets rose by more than 500% in less than 12 months
- Experts say UK is lagging behind measures taken by other European countries
Energy bills are set to skyrocket even further in the new year, providers have warned.
Good Energy, EDF and trade body Energy UK have told the Financial Times that the Government urgently needs to intervene after the cost of gas in wholesale markets rose by more than 500 per cent in less than a year.
Emma Pinchbeck, chief executive of Energy UK, described the situation as a ‘nationwide crisis’.
She told the FT: ‘Other treasuries in Europe have already responded to the crisis, but in the UK, the energy sector is still asking if the Chancellor knows that energy bills going up by over 50 per cent in the new year is a problem for ordinary people, businesses and the economy.’
Experts have called for urgent intervention after the wholesale cost of gas rose by more than 500% in less than a year and say the UK response is lagging behind other European countries
Nigel Pocklington, chief executive of Good Energy – a small renewable energy firm, told the newspaper the UK is facing a ‘national crisis’ after recent rising prices created ‘an extremely difficult operating environment for every business in the industry’.
EDF Energy has also warned the Government must act immediately to support customers.
More than two dozen energy suppliers have gone bust since the start of September, putting thousands of people out of work and leaving millions of homes in limbo as they wait for a new supplier.
The biggest failure to date has been Bulb, once an energy success story which fell into administration on Wednesday.
While customers of the other 23 failed energy companies will be moved to a new supplier by Ofgem, Bulb simply had too many customers for this to be possible.
Instead it will continue to trade until it can be sold, or its customers slowly moved elsewhere.
More than two dozen suppliers have gone bust since September, putting thousands of people out of work and leaving millions of homes in limbo as they wait for a new supplier via Ofgem
Suppliers said the cost will be passed on to households up and down the country, putting further pressure on already rising bills.
Many in the energy industry blame part of the problems on the energy price cap. The cap is currently set every six months, and as gas prices have soared in recent months it has forced suppliers to provide energy to households at eye-watering losses.
The Government has set aside £1.7 billion to support the company’s operations in the meanwhile, a burden which could find its way onto household energy bills.
The industry regulator, Ofgem, has proposed a series of short and long-term solutions to the issues the price cap causes in extreme circumstances.
These include reviewing the price cap every three months, or overhauling it in favour of a six-month fixed tariff.
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