Energy bills predicted to surge by nearly £300 a year from July
Cornwall Insight’s for the price cap from July to September now stands at £1,929 for a typical dual fuel household.
Household energy bills could increase by nearly £300 a year in July due to the Iran war, experts have warned.
Cornwall Insight’s predicted Ofgem’s the price cap from July to September would hit £1,929 for a typical dual fuel household. This would be an increase of £288 or 18 per cent on April’s cap.
This marks a slight fall from its prediction earlier this month that the cap would surge to £1,973 in July.
Cornwall Insight said this was caused by a “partial steadying in wholesale markets after a pause in energy infrastructure strikes and signals of a potential ceasefire in the Middle East conflict”.
But it warned a rise in the cap in July was “effectively unavoidable” with rocketing wholesale prices over March now locked into the calculation and little chance that they will fall below pre-war levels in the coming weeks.
The price most households pay for energy under the cap fall by seven per cent from April 1, or £117 a year to £1,641.
This is because the UK Government has removed green subsidies, which it has said will cut an average bill be £150.
But the Government has said it is looking at helping the poorest households with their bills due to the likelihood of a big jump in gas and electricity costs.
Ofgem will confirm its next price cap level by May 27.
Craig Lowrey, principal consultant at Cornwall Insight, said: “A rise in July is pretty much unavoidable, but how high prices go remains to be seen.
“There is some relief in the timing, summer is when energy demand is at its lowest, which should soften the impact on household energy expenditure.
“If higher wholesale prices continue, it will be the effects on the October cap that have the most impact, and that is when the question of government support for households is likely to be revisited.”
Minister for energy consumers - and MP for Inverclyde - Martin McCluskey said: “Tackling the affordability crisis is our number one priority and I know many families will be thinking about how events in the Middle East might impact the cost of living at home.
“We will continue to fight people’s corner through this crisis and, as the Energy Secretary has said, if it’s necessary to intervene, we will.”
Claire Coutinho, Tory Shadow Energy Secretary, said: “It is unforgivable that Labour are continuing with Ed Miliband’s mad plan to shut down our own energy supplies in the middle of an energy crisis.
“Shutting down the North Sea means we are losing out on £25 billion in tax receipts that we could use to cut bills and reduce the cost of living.
“The Government must adopt the Conservatives’ Cheap Power Plan to cut bills by £200 immediately by taking VAT, taxes and levies off energy bills without costing taxpayers a penny. We would cut bills for everyone rather than taxing working people to fund yet another bailout for people on benefits.”
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