As the price of gas continues to rise, the energy price cap is projected to rise – Bestgamingpro

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With only a few weeks until the new level for the energy price cap is announced on February 7th, a number of energy companies and experts have warned that we may expect to see it rise once more.

The present limitation, set in October 2021, limits the maximum rate energy companies may charge consumers for their default tariffs to £1,277 per year, but given the continued rise in wholesale gas prices, the new cap is almost going to follow suit.

What is the likely increase in the price cap?

While it’s almost commonly acknowledged that the maximum will be raised, determining the precise amount is currently difficult, and we can only guess based on available statistics. According to Greg Jackson, CEO of Octopus Energy, we “truly don’t know” how high Ofgem will set the new quota, according to the BBC’s Today Programme.

Others have expressed similar concerns, including OVO Energy CEO Stephen Fitzpatrick, who expected significant price hikes in December, calling them “an tremendous crisis for 2022” for homes.

Similarly, Emma Pinchbeck, the president of trade group Energy UK, told the BBC last month that energy costs are “at levels that, really, we have not seen before” and that things are “looking pretty serious for the spring,” with energy bills potentially “going up 45-50 percent.”

Greg Jackson also talked about how the UK needs to find new solutions to deal with the existing energy debts that have accumulated as a result of the current energy crisis. At the same time, consumers will be better protected, and more providers will not go bankrupt.

“The reality is that the UK buys most of its energy on the global market, and we’ve had to pay around £20 billion more this year than usual.” So the UK will have to pay that money one way or another.”

Intervention by the government could help the issue.

‘Subsidize the energy corporations themselves by creating a fund that would allow them to draw on government funding when wholesale gas prices were very high, then pay it back when prices plummeted again,’ Mr Jackson suggests. This fund would allow energy firms to spread their costs over a longer period of time, resulting in lower consumer bills than they have been in the past.

Mr Jackson, however, recognised that such involvement would come at a cost to taxpayers in the long run, and that larger energy suppliers would need to provide more financial support as well.

“We have to recognise that every sector is seeking the Treasury for support as a result of the pandemic, and there isn’t a limitless supply of money there, it isn’t free,” he said.

“We can soften the bill for the UK; that is something we as an industry can work on before we turn to the public purse or elsewhere for assistance.” The energy sector has always had easy access to private capital, and there may be opportunities to tap into more capital in the future to spread out costs.”

Is there anything that can be done to save money?

Although talks between the UK’s energy suppliers and the Department for Business are underway and should result in a resolution, the underlying issue is that bills will almost probably rise for the country’s families once more.

We are also not encouraged to do an energy comparison and switch to a new tariff at this time, since the present cap is the greatest energy deal available, even from the country’s leading energy suppliers. Those wishing to save money might consider the following options:

Some vulnerable homes may be eligible for a portion of the £500 million Household Support Fund, which is distributed to local councils to assist with the cost of household bills.

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