What's happened with energy prices?
‘Bleak Friday’ has arrived and plunged 2.5mln households into ‘fuel stress’ after a significantly hiked energy price cap.
That means two in five families are now paying more than 10% of their income on heating and fuel, according to estimates from the End Fuel Poverty Coalition.
In February it was announced that the energy price cap would increase on April Fool’s Day, taking bills for typical annual usage from £1,277 to £1,971 or a 54% hike.
Why has this happened?
Gas and oil prices began to spike last year following a squeeze on wholesale gas supplies after demand bounced back following Covid-19 lockdownst o unprecedented levels in autumn before spil=iking again before Christmas.
At the beginning of 2020, when the world came to a standstill, global energy consumption plummeted, but following the resurgence European countries struggled especially as many had low gas stocks at a time when worldwide com=nsuption rebounded much faster than expected.
In the UK, more than 30 independent energy suppliers collapsed due to not being able to pass on teh wh#higher wholesale gas price because of the UK price cap.
Now, Russia’s invasion of Ukraine has exacerbated the problem as the West issued sanctions on Putin’s state, which included not trading with the country.
Russia was a large gas supplier to much of Europe, admittedly not the UK so much, which further complicated supply chains and added to the price shocks.
When will the crisis end?
Household energy bills are likely to rise further in autumn as the war intensifies the gas disaster, according to Octopus' chief executive, who was speaking to Sky News.
Greg Jackson believes UK customers are “stuck” with sky-high prices for the foreseeable future.
The owner of the energy provider with over two million direct customers urged the government to re-evaluate its support package in the coming months to alleviate inflation worries for homes.
"The price keeps going up because we had a global energy crisis, exacerbated by the terrible war in Ukraine, and in the short term, the UK is stuck with these energy prices.
"Wholesale markets are incredibly volatile and we can't predict where they're going to go, but if they stay where they are we will see prices go up again in winter.
"I really hope that over the summer the government watches the situation and is ready to step in with more support for customers if that stays the case," Jackson commented.