Energy Bills in Britain to jump 13% on Impact of War on Iran

British households will face higher energy bills averaging £1,862 a year ‌from July after regulator Ofgem hiked its price cap by 13% on soaring wholesale gas prices caused by the conflict in the Middle East.
The increase, up around £221 from the previous cap of £1,641 for April to June, will hit millions of households on variable tariffs, with analysts warning bills could climb further if disruption to shipments through the Strait of Hormuz persists.
The rise piles further pressure on Prime Minister Keir Starmer as households struggle with rising living costs. “The rise in the price cap because of a war we did not choose ⁠is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that’s why easing that burden is our number one priority,” Energy Minister Ed Miliband said in a statement.
Wholesale British gas prices are around 45% higher than they were before the United States began military action against Iran on February 28, blocking the transit route for a fifth of the world's liquefied natural gas. Wholesale costs are the biggest single driver of Ofgem's quarterly price cap, which limits what suppliers can charge households and also reflects network costs and environmental levies.
That said, consumer groups have urged the government to lay out plans to provide support for households. “Now is the time for the government to set out targeted interventions to help those on the lowest incomes afford their energy and to ‌clear their ⁠debt,” National Energy Action Chief Executive Adam Scorer said.
The government has noted that its push to reduce reliance on gas and increase renewable capacity, such as wind and solar, will cut costs in the longer term. In April, it also shifted some levies to cut around £150 from an average bill. Even so, the new price cap is around 46% higher than in the winter of 2021/22, before Russia's invasion of Ukraine led to a spike in global energy prices.

(Source: Reuters)