The suppliers have stated that the price cap is not fit for purpose to protect customers from sharp rise in energy prices.
Rising gas prices have put nine domestic energy firms out of business, forcing 1.7 million customers to find new energy providers at higher rates.
Energy firms have warned that the closure of suppliers will lead to higher energy costs for households. He also called the energy price cap “too good to be true”. Paul Richards, chief executive of Together Energy, which he said is currently reporting losses, told BBC Radio 4’s Today program: “The price range as a mechanism is not industry-appropriate, nor is it appropriate for the customers.”
“When the opposite situation arises and wholesale prices start to fall sharply, the price offered to customers in April may look like a very bad deal, whereas the price range feels like a price at this point in time. which is too much. It’s too good to be true,” he said.
Mr Richards said the energy cap protected customers in the short term, but failed suppliers resulted in between £1 billion and £3 billion in costs that would be placed on businesses and homes.
Energy prices for homes have risen significantly
“height=”2497″ width=”3650″ srcset=”https://static.independent.co.uk/2021/10/08/19/PRI203923743.jpg?width=320&auto=webp&quality=75 320w, https:/ /static.independent.co.uk/2021/10/08/19/PRI203923743.jpg?width=640&auto=webp&quality=75 640w” layout=”responsive” i-amphtml-layout=”responsive” Energy prices for homes have risen significantly
Energy prices for homes have risen significantly
Energy regulator Offgame has already echoed this, warning that customers will see a “significant increase” in energy prices this coming spring, despite protections from energy price caps. Offgame CEO Jonathan Brearley BBC Radio “Given the costs that will be incurred in the system, we are expecting a significant increase in April.”
Gas prices are already at record highs as economies around the world recover from the pandemic. Bulk gas prices on Thursday were ten times higher than in October last year. Some analysts estimate that bills could rise by £400 or more next year if wholesale prices continue to rise.
Ofgem may replace the energy cap twice a year. After raising it in April due to rising wholesale costs, it raised the cap 12-13 percent to £1,277 a year from 1 October.
The British Chambers of Commerce (BCC) has also called for the introduction of an energy price cap for SMEs battling rising gas prices. However, British Glass chief executive David Dalton pointed out BBC News That a price cap for SMEs would help but “too little was too late.”
Average annual energy bill to reach £2,000, ministers warn
The energy price cap warnings come as the government prepares to push gas bill levy plans to fund low-carbon heating within the next two weeks, many times has reported.
The new strategy, which will reportedly be published ahead of the start of the Cop26 climate conference in Glasgow next month, includes a new carbon pricing scheme that will push up the price of gas bills even more.
The government will commit to cutting the price of electricity – which is much higher than that of gas – over the next decade by removing green levies on electricity bills and imposing new tariffs on gas bills in a bid to end “price distortions”.
a government source told many times That the plans were “madness” and that Downing Street were failing to appreciate “the reality of the problem we are facing with energy prices”. The source added: “There’s still a feeling that we just put it out there and it gets better in a few months’ time. But it’s pretty clear that it’s going to get worse before it gets better.”
A spokesman for the Department of Business, Energy and Industrial Strategy said: “We will soon formulate our upcoming heat and buildings strategy. No decision has been made.”
Ministers have been warned that the average annual energy bill could reach £2,000 next year if wholesale prices continue to rise. The price of natural gas is 213 pence per therm, which is 461 percent higher than last year.
Companies ‘Days Away’ by Stopping Production
Leaders of Britain’s energy-intensive manufacturers such as steel, glass, ceramics and paper have warned the government that unless something is done about rising wholesale gas prices, they will be forced to stop production. can be done.
Despite talks with Business Secretary Quasi Quarteng on Friday, industry leaders have said there was no immediate solution or commitment.
UK Steel boss Gareth Stace told channel 4 news: “What we are asking Quasi Quarteng to do on wholesale prices today is just to take steps, in the short term, to ease that pressure, as in Portugal or Italy. Their governments are already working on their industries. We are investing billions of euros to help and the UK government has not done anything yet.”
“We can’t wait until Christmas and beyond. Or even a couple of weeks. We need action now, it needs to be swift, decisive action,” Mr. Stace said.
“At the moment, there is an energy crisis,” Stace said. “If the government doesn’t do anything, tomorrow there will be a steel crisis.”
Dave Dalton of British Glass said some companies were days away from stopping production.
Andrew Large, director general of the Confederation of Paper Industries, also said it was clear there were “serious risks” of a factory halt because the gas price was too high to bear. He warned that this would create an impact in consumer retail through the supply chain.
Conservative lawmakers have joined forces with Labor in calling on the government to provide more aid in the bulk gas crisis. Conservative MP for North West Leicestershire Andrew Bridghan and…
Credit: www.independent.co.uk /