Wholesale gas and electricity prices in the “stratosphere” threaten Britain’s “national crisis.” Energy companies have warned that they are putting pressure on UK ministers to protect customers and suppliers from fluctuations in commodity markets.
London-listed Good Energy, EDF, and the industry group Energy UK It became the latest A company seeking government emergency intervention on Wednesday, the day after the UK’s wholesale gas prices set a new record of 450p per therm. Since then, prices have fallen to 417p, but remain at unprecedented levels.
“This is a national crisis. Nigel Pocklington, CEO of Good Energy, a small supplier of renewable energy, told investors that the situation is getting worse. Warned that it would hurt the company’s full-year profits by another £ 3 million.
EDF Energy, the UK’s fourth-largest supplier, warned that the situation is now “critical” as it called on the government to “act now to support energy customers.”
Energy UK CEO Emma Pinchbeck told the Financial Times that the UK is currently facing a “whole market crisis.”
“Europe’s other Treasury has already responded to the crisis, but in the UK, the Prime Minister knows that in the UK, energy prices rising by more than 50% in the New Year is a problem for the general public and businesses. I’m still asking if I’m doing it, and the economy, “she added.
Analysts have warned that continued volatility in the wholesale energy market over the past few weeks could raise UK household costs by more than £ 700. £ 2,000 a year From April, when the country’s energy price cap will change next.
Investment bank Investec has calculated that this could increase inflation by 1.8 percentage points in April.
It is understood that the UK minister is considering some potential options for households to mitigate the effects of the significant surge in the bill.
These include finding ways to spread price increases over a longer period of time.Possible cut-in 5% value-added tax rate on energy chargesAnd expansion of the warm home discount system to support 2.7 million households.
However, no decision has been made yet, one source said.
Regulatory Ofgem will announce the upper limit level for April in February. However, EDF warned that it is unlikely to be the last of the bill’s rise.
“By October next year, the cap could easily exceed £ 2,000,” said Philippe Commeret, Managing Director of Customers at EDF Energy.
Gas is skyrocketing in Europe as well, with cold weather, nuclear power plant shutdowns in France, and Russian supplier Gazprom.. They closed at a record € 181 per megawatt hour on Tuesday, pushing up industry energy costs and increasing inflationary pressures.
So far, 26 UK energy suppliers have gone bankrupt since the beginning of August, as soaring wholesale prices have exposed defects in the business models of many companies. Industry executives warn that even well-managed companies are now hurt.
“”[Tuesday, when UK gas prices hit 450p/therm] The horn has disappeared, “said a senior executive in an industry.
Different suppliers have highlighted different possible interventions.
This includes an urgent price cap increase Earlier than the next planned change In April, companies will be able to pass costs on to their customers sooner.hand over Expected plunge in VAT About energy charges to the most vulnerable households.Taxation on household energy bills paying for policies such as supporting the growth of renewable energy General taxation..
Energy companies warn when gas prices rise and a “national crisis” occurs in Britain
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