Households are facing the steepest summer rise in energy bills for four years after Ofgem announced a 13% increase in the price cap.
‘The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country,’ Energy Secretary Ed Miliband said.
From July, the average annual gas and electricity bill will rise from £1,641 to £1,862, adding around £221 a year to typical household costs – the highest level for the cap since the first quarter of 2024, when it was £1,924.
Under the new cap, electricity prices for customers paying by direct debit will rise from 24.67p to 26.11p per kilowatt hour, while gas prices will jump from 5.74p to 7.33p per kilowatt hour.
Although the increase remains below the record highs seen during the energy crisis that was sparked when Russia first invaded Ukraine. In 2022, the cap peaked at £4,279 in the first quarter of 2023 but bills were restricted to £2,500 a year under the government’s energy price guarantee.
‘The way to get bills down for good and avoid these price spikes is to go further and faster with this government’s drive for clean homegrown power we control,’ Miliband added.
Meanwhile, increases are also being felt beyond energy bills. Petrol costs have climbed by almost 20% in recent weeks to an average of 159.43p a litre, according to the RAC, while diesel has risen by more than 30%.
Tim Jarvis, interim chief executive of Ofgem, told BBC Radio 4: ‘We have seen wholesale prices increase. They have been very volatile but they have been broadly much higher than they would normally be at this time of year, and that is what is filtering through now into the adjustment to the price cap.’
He warned: ‘It is unfortunately now looking like a more long-term disruption to markets than we might originally have hoped.’
The latest official data shows households collectively owe £4.5bn in unpaid bills, with part of the cost recovered through charges spread across customer bills.
Danny Gross, energy campaigner at Friends of the Earth, said: ‘Today’s news that energy prices are set to soar once again, will come as a fresh blow to the millions of us already struggling with the rising cost of living. Meanwhile, the fossil fuel giants – who’ve recently posted bumper profits – are raking it in and laughing all the way to the bank.
‘The UK remains one of the most gas-dependent nations in Europe. It’s our reliance on fossil fuels to power and heat our homes that’s keeping us stuck on the rollercoaster of volatile energy prices.
‘But we already know how we can get off – by harnessing the vast potential of the UK’s cheap, clean, homegrown renewable energy resources.’
Image: Arthur Lambillotte/UnSplash
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