What’s in store for energy bills?

 

June 11, 2008

For the past couple of years energy prices in the UK have been at the centre of controversial debate, with price hikes affecting consumer finances enormously and concerns over anti competitive practices amongst energy firms. Over the past couple of years gas and electricity prices in the UK have been soaring, and this has resulted in household finances becoming increasingly strained, particularly given that between August 2006 and July 2007 interest rates went up five times by 0.25% each time, making the financial situation even worse for many.

Thankfully there were some significant reductions in gas and electricity prices towards the beginning of last year, with the major energy suppliers cutting bills by a noticeable amount because wholesale energy prices had fallen. With interest rates having soared so high the news that energy bills were coming down was great for many households. However, the good news was short lived, and towards the end of the year energy firms announced that the cost of wholesale energy had risen again and that this meant that they would have to increase the cost of gas and electricity usage.

Sure enough, at the start of the year energy firms began to announce their rate hikes, and within weeks the major suppliers had increased the cost of gas and electricity usage by a significant amount. With many households still struggling to meet mortgage repayments despite a base rate cut in December, and with the global credit crunch causing even greater difficulties in terms of finances, the rises in energy bills couldn’t have come at a worse time, and simply added to the strain that many households were already experiencing.

However, there is more bad news to come according to some industry officials. Recent reports show that the cost of wholesale energy is due to go up even more, and this means that energy firms are likely to hike up energy usage costs yet again in the autumn. In fact, prices could go so high that the average household gas bill could break through the £1000 a year barrier for the first time, with the average annual electricity bill higher still.

According to figures the average gas bill will go from around £665 a year to £1091 a year over the course of this year. Electricity prices are set to soar from an average £1050 a year to £1500 a year. One official said: ‘If this year’s rises weren’t bad enough, gas prices are set to get much, much worse. Wholesale gas prices are double what they were this time last January. We all know this will have a gigantic impact and if these increases are passed to the consumer in their entirety, the UK could be facing a whopping 64% rise in gas prices.’

An Energywatch spokesperson added: ‘It’s going to be pretty catastrophic. There has already been lots of talk and preparing the ground for price increases from the energy companies so it’s an inevitable fact. But we need it stated much more clearly exactly what is the relationship between wholesale prices and domestic prices.’

Recent articles:

Related Articles

  • Watch out for rising gas bills
    • Energy giants, including British Gas, have cut the cost of gas and electricity since March of this year, which was great news for customers. However, it
  • Watch out for rising gas bills
    • Energy giants, including British Gas, have cut the cost of gas and electricity since March of this year, which was great news for customers. However, it
  • Water bills could rise by up to 9%
    • According to a recent report water companies will be able to increase the cost of water bills by up to 9% next month, with the
  • Energy prices could be going up again
    • After having to deal with sky high energy usage costs in 2005 and 2006, many household in the UK were relieved to see their household
  • Scottish power energy prices rise
    • Following in the footsteps of several of the other major energy suppliers in the UK Scottish Energy recently announced that it would be raising its

Written by admin · Filed Under Featured, Utilities 

Comments

Got something to say?