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UK energy bills might rise by 50% amid soaring gas & electricity prices

UK energy bills might rise by 50% amid soaring gas & electricity prices
UK energy bills might rise by 50% amid soaring gas & electricity prices

The energy bills in the United Kingdom, as suggested by a recent study, could rise by 50 percent in the spring as the nation faces a crisis over surging wholesale electricity and gas prices.

Energy UK, the energy trade association, called the government to mediate and curb the cost of bills as surging wholesale prices drive numerous energy companies out of business.

Emma Pinchbeck, Chief Executive of Energy UK, warned that domestic energy prices are expected to surge by 45% to 50% in the spring.

Pinchbeck noted that this issue is prevalent throughout the system and looks serious for the spring season. She has asked for the U.K. Treasury to interfere as others in Europe.

While wholesale prices continue to rise, the price cap on the energy bills in the United Kingdom stops companies from passing those costs on their customers. Since October, the price cap set by industry regulator Ofgem has been set at £1,277.

This is due to change in April when the regulator is set to increase the cap substantially, which will result in a significant rise in consumer bills.

Pinchbeck added that the nation has observed surging gas prices across Europe since September and over the last two weeks, the prices have increased by unprecedented levels. This is alarming with the U.K being in the middle of a pandemic along with the ongoing winter period and other issues of inflation, cited Pinchbeck.

She also stated that nearly a fifth of an energy bill of a consumer in the U.K. is controlled by suppliers. The government decides other costs like VAT along with green energy levies, which could be curbed to help domestic consumers.

Many other governments around Europe have reduced taxes on bills which would save nearly £90 per customer in the United Kingdom. The government is consulting on removing policy costs on energy bills, primarily on electricity bills.

Source credits: https://www.irishtimes.com/business/energy-and-resources/uk-energy-bills-may-rise-by-50-amid-national-crisis-of-soaring-prices-1.4762906

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