The cost of the global energy crisis caused by Russia’s invasion of Ukraine will reach £3,000 for the average British household by the summer, after another expected increase in bills in April.
The average annual bill in Great Britain under the latest energy price cap is forecast to be about £750 higher than in the pre-invasion winter of 2020-21, a 75% increase, according to calculations by the End Fuel Poverty Coalition, a campaign group. The cumulative toll of the price increases in the last four years comes to £3,033, the group said.
Global energy prices soared after Russia’s invasion of Ukraine, which began three years ago on Monday. In response, European countries scrambled to wean themselves off Russian gas rather than fund the war ordered by Vladimir Putin. Gas prices rose and have not fallen back to prewar levels.
That has meant that most households in Great Britain have since then been paying the maximum allowed under the government’s energy price cap. This was introduced in 2019 to ensure people who do not shop around for energy were not paying far over the odds but has since become the de facto rate for millions of people.
Ofgem, Great Britain’s energy regulator, is due to announce the level for bills from 1 April later on Tuesday. Analysts at Cornwall Insight, a consultancy, have forecast a 5% increase in the cap for the three months from 1 April to £1,823.
The extra costs came even after the government’s energy price guarantee, which prevented energy prices from rising above a rate of £2,500 a year. In practice the prices households pay can be considerably more than the cap because the cap is based on a rate per unit of energy used.
The End Fuel Poverty Coalition said the extra costs would be particularly difficult for poorer households and those with higher usage such as larger families and those using medical equipment.
Simon Francis, the campaign group’s coordinator, said: “The burden of high energy bills has gone on long enough and as long as our energy bills remain tied to the cost of gas, households continue to be at the mercy of global markets and a fossil fuel industry which is making billions of pounds in profit every year.
“But alongside the transition away from reliance on gas, it’s crucial to provide support for vulnerable households struggling with energy costs now and to invest in improving energy efficiency of homes.”
The regulator last increased the cap in January by 1.2% to a rate equivalent to £1,738. That compared with a cap equivalent to an average energy bill of £1,042 in the six months to March 2021.
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Caroline Simpson, a manager for Warm This Winter, another campaign group, said the UK should rapidly increase renewable power generation, as well as decouple the price of renewables from gas prices.
“These constant hikes show the UK is still too reliant on foreign energy imports and the answer is not more North Sea drilling,” she said. “Our gas fields are now virtually exhausted and any resources extracted as a result of new developments would be sold on the open market, making vast profits for foreign-owned energy giants and doing nothing to bring down bills for ordinary people.”
