Britons face skyrocketing energy costs

The energy price cap could increase by 80% to £3,549 on the back of higher wholesale energy prices, says U.K.’s energy regulator

With winter approaching, Britons were told that the average household’s gas and electricity costs could skyrocket come October, as Ofgem, the U.K.’s energy regulator, announced that the energy price cap — the maximum energy tariff consumers can pay — increased by 80% on the back of higher wholesale energy prices.

The price cap increase, to £3,549 ($4,201 or ₹3,35,412), was due to a continued increase in wholesale gas prices, which began as the world emerged from pandemic lockdowns and has been exacerbated by Russia restricting gas supplies to Europe, according to a statement from Ofgem.

The hike, while expected, comes as the U.K. is experiencing double digit consumer inflation (10.1% in July), moving into recession, and dealing with a leadership vacuum in Downing Street, with Prime Minister Boris Johnson on the way out and a successor yet to be named.

“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year,” Ofgem CEO Jonathan Brealey said on Friday.

U.K. Foreign Secretary, Liz Truss, the frontrunner for the Conservative Party’s leadership and the post of Prime Minister, is planning a reversal of national insurance and getting rid of the environmental levies on energy bills. Her opponent, former Chancellor Rishi Sunak, had said he would stop VAT payments on energy bills.

“I am begging and praying and pleading that there is more government help this winter so that people do not die,” Martin Lewis, a budget and saving specialist, told the BBC. The next Prime Minister’s name will be announced on September 5.