Wednesday, August 17, 2022
UncategorizedBrits Anxious As Energy Price Rise Confirmed?

Brits Anxious As Energy Price Rise Confirmed?

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Households are in for a nasty wake up call in 2022 as gas and electricity providers increase their charges even further.

Photo by Ilse Driessen on Unsplash

Reality check

Last month, energy regulator Ofgen warned consumers that the new caps on prices will mean that the average UK household will be paying close to £2,000 annually to heat and light their homes. This 54% increase was shocking enough news when it was announced last month; however, now consumers are facing a harsh reality shock as the actual unit prices have been published. 

Now, consumers are reading that from the 1st April 2022, they will be paying daily charges of as much as 51p per day for gas and electricity. As a consequence, consumers nationwide will be facing an annual increase of around £700 or more for their energy bills.

Russia’s role 

With the added political tensions caused by Russia’s invasion of Ukraine, the price of gas is expected to rise even further. Following the news of the invasion, wholesale gas prices rose by 28%. If these effects continue, there will need to be new estimates provided for the overall annual increase in energy prices. As a result of these effects, gas and electricity bills could increase by around £3,000 annually. Analysts have warned UK consumers to brace themselves for a substantial hike in energy prices. Even though UK households do not depend very heavily on Russian gas specifically, the price increase comes from a disruption of the wholesale market.

Price breakdown

British Gas is one of the energy companies reported to have capped their tariffs. This means that from 1st April, British Gas customers will pay 28p-30p per kWh for their electricity. They further stated that there will be a daily standing charge of 27p-27p for gas and 45p-51p for electricity. Shell Energy and EDF have outlined similar rates in line with the new price caps.

Customers paying by cash or cheque, or those with a prepayment metre, will be facing yet more charges whereas those paying by direct debit can benefit from at least some small savings. 

Dan Kettle of finance provider, Pheabs, explained: “The prices outlined are only averages and will vary depending on energy company and location.” 

“As an example, a British gas dual-fuel customer paying by direct debit will pay £262 annually just in standing charges, before consuming anything; for those with prepayment metres this figure will be £318.”

“The only households who will escape the price hikes are those who have a long-term fixed tariff signed with a supplier.”

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