Millions of Britons face 54% hike in energy bills from April

Millions of Britons face 54% hike in energy bills from April
# 03 February 2022 16:05 (UTC +04:00)

Energy prices for millions of British households are set to soar from April after the energy regulator said on Thursday that it would raise its cap on the most widely used tariffs by 54% due to record global gas prices, APA reports citing Reuters.

The rise comes amid a cost of living crisis as inflation and food costs rise. Regulator Ofgem said it had no choice but to raise the cap, which covers around 22 million households, following record global gas prices last year.

“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event,” Jonathan Brearley, chief executive of Ofgem, said.

Benchmark wholesale European gas prices rose more than 300% last year, pushing up the cost of electricity and leading to the collapse of more than 25 British energy suppliers.

Ofgem calculates the cap using a formula that includes wholesale energy prices, energy suppliers' network costs and costs of government policies such as renewable power subsidies.

Wholesale energy costs make up around 35% of the total costs of a duel fuel (gas and electricity) bill.

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