After Ofgem confirmed an 80% increase in the price cap, which will force the average household’s yearly bill to soar from £1,971 to £3,549, Nadim Zahawi today advised Britons to start reducing their energy usage because “there’s a war on.”
From October 1, the change will impact 24 million Britons, and the 4.5 million people with pre-payment metres, who are frequently the most needy and already experience fuel poverty, might have even higher average bills of £3,608.
The Chancellor responded, “The reality is that we should all look at our energy consumption,” when asked by broadcasters if it was time for citizens to examine their energy use. It is a challenging period. War rages across our continent.
“Very few people have war in mind. Wars erupt in remote locations. It is currently with us. We must maintain our fortitude. My duty is to provide that assistance.
Mr. Zahawi acknowledged that the price cap hike would make people “stressed and anxious,” but he added that the government was working “flat out” to create more options for homes.
As Putin raises energy costs in retaliation for our backing of Ukraine’s valiant liberation movement, he declared, “I am working nonstop to create avenues for further support.”
This will enable the new prime minister to get started quickly and provide assistance to those in need as soon as feasible.
Martin Lewis, the founder of MoneySavingExpert, issued a warning today that some individuals would perish this winter because they couldn’t afford to pay for their energy.
He said, “I’ve been accused of catastrophizing over this scenario,” on the Today programme of BBC Radio 4.
This is a catastrophe, plain and simple, which is why I’ve catastrophized.
“Lives will be lost this winter if we do not receive additional government involvement on top of what was announced in May.”
The consumer advocate added that some consumers will now spend up to £10,000 in costs annually as a result of the most recent increase in the ceiling.
He also cautioned that although there is no cap on the greatest amount you may pay, businesses are only allowed to charge a certain amount per unit for gas and electricity.
Right now, this works out to £1,971 per year for the typical home.
For a typical gas user, the corresponding per unit amount is 15p per kWh with a standing fee of 28p per day.
Jonathan Brearley, the CEO of Ofgem, foresaw the difficulties that rising energy prices would bring about this winter and pleaded with the new prime minister and Cabinet to “offer an additional and urgent reaction to sustained climbing energy prices.”
He added that the cost of gas this winter was fifteen times higher than it was two years ago.
The regulator claimed that the hike was a result of the ongoing rise in wholesale gas prices around the world, which started to soar as the pandemic subsided and were further pushed up by Russia gradually cutting off gas supplies to Europe.
Additionally, Ofgem issued a warning that energy prices may get “much worse” in 2019.
According to the regulator, some suppliers may start raising the amount that direct debit clients pay prior to October 1 in order to spread out payments, but any money taken by suppliers will only ever be used to provide energy to families.
Which? has urged the government to increase the energy bill discount by at least 150%, warning against doing anything less at the risk of putting millions of people in dire straits.
The consumer protection agency said that the financial assistance provided by Ministers to all households should increase from the present £400 to £1,000, or from £67 to £167 per month from October to March.
However, the Boris Johnson Administration won’t be announcing any additional assistance right away.
Instead, big financial choices will have to wait until either Liz Truss or Rishi Sunak are in charge at No. 10 following the Tory leadership election.
If elected prime minister, Miss Truss promised to provide “immediate support” to help with skyrocketing expenses and said she would use an emergency budget next month to “guarantee support is on its way to get through these challenging times.”
Both Miss Truss and her opponent Mr. Sunak have promised to maintain the £15 billion support programme outlined in June.
When the October cap increase goes into force, the number of UK households experiencing fuel poverty will have increased, according to the nonprofit National Energy Action.
As of October, 8.9 million homes would be in fuel poverty, up from 4.5 million in October of last year. It also accounts for the government assistance programme unveiled in May.