Eco
British households will face an increase in average energy bills to £1,862 annually starting next July, after the energy regulator Ofgem raised the price cap by 13% due to rising wholesale gas prices caused by the Middle East conflict.
The increase represents around £221 compared to the previous cap of £1,641 for the April to June period, affecting millions of households amid warnings of further rises if shipping disruptions through the Strait of Hormuz continue.
Energy Secretary Ed Miliband said that raising the cap as a result of a war Britain did not choose is news that weighs heavily on families, stressing that easing the impact of the increase remains a government priority, as the rise comes amid declining consumer confidence and mounting pressure on Prime Minister Keir Starmer amid high living costs.
Data indicates that wholesale gas prices in Britain are around 45% higher than they were before the US military operations against Iran began in February and before the closure of a route through which a fifth of global liquefied natural gas exports pass, with wholesale purchase costs being the largest component of Ofgem's quarterly price cap alongside network costs and environmental levies.
The government affirms that its policies aimed at reducing dependence on gas and increasing renewable energy will contribute to lowering costs in the long term, and in April the government reduced some levies cutting average bills by around £150 annually, although the new cap remains around 46% higher than it was in winter 2021/2022 before the global energy price shock.
